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Debt-for-nature swap deal
August 27 , 2023
328 days
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- Gabon announced a $500 million debt-for-nature swap.
- This is the world’s second-largest deal signed under blue bond to refinance.
- In Africa, it is the largest such deal signed by any country to refinance its debt and conserve marine resources.
- Debt-for-nature swaps allow heavily indebted developing countries to seek help from financial institutions in the developed world with paying off their debt if they agree to spend on conservation of natural resources.
- Usually banks in developed countries buy the debts of such counties and replace them with new loans which mature later.
- These have lower interest rates.
- Gabon’s debt has been restructured under a Blue Bond is the world’s second-largest debt-for-nature swap.
- In May 2023, the world’s first and largest debt swap to conserve oceans was signed by Ecuador.
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