Sri Lanka is among a few countries that could benefit from debt-for-nature swaps, where poorer countries have debt written off in return for protecting ecosystems such as barrier reefs or rainforests, a new report has calculated.
According to Reuters, the UK-based, non-profit International Institute for Environment and Development (IIED) reveals Debt-for-nature swaps could provide $100 billion for the fight against climate change
IIED has based the estimate on the possibility of debt swaps in many of the 49 less-developed countries seen as most at risk of debt crises.
Laura Kelly, the director of IIED’s sustainable markets research group, said countries that could benefit included Sri Lanka, Pakistan and The Gambia in West Africa.
“For governments (that do debt swaps) it creates some fiscal space, but also it helps to achieve outcomes in terms of climate and nature that have global impact,” Kelly said, adding that many countries were interested in potentially doing them.
The IMF and World Bank, whose figures the analysis is based on, estimate the countries focused on collectively owe $431 billion, mostly to wealthier governments, the IMF itself and pension and hedge funds.
The aim of IIED’s report is to encourage a drive for more debt swaps at the upcoming IMF and World Bank Spring meetings which start later this week. (Newswire)