Government prepares for launch of “debt-for-nature swap”

Economic Affairs Minister Michael Halkitis confirmed the plan in a recent interview with Reuters, indicating the swap could involve less than $500 million of debt and could be finalized by this fall. This initiative reflects a global trend where countries promise to enhance the protection of critical ecosystems in exchange for debt relief.

Prime Minister Philip Davis referenced the plan during the unveiling of the 2023-2024 Budget in the House of Assembly.

According to Halkitis,  the “debt-for-nature” swap, launching within the next two to four months, will concentrate on enhancing the country’s network of marine parks and protected areas. The first debt-for-nature swap was initiated in 1987, and while over 100 such deals have since followed, leveraging them to alleviate international bond market debt has gained momentum only recently. This approach involves purchasing foreign debt, converting it into local currency, and utilizing the proceeds to fund conservation activities.