Publication Date: 12-2023
Insufficient and loan-based climate finance adds to debt burden in developing countries, hindering public investment in climate action. Debt-for-Climate (DFC) swaps promise to tackle both issues, but their potential remains unexplored. This research report examines the international experience with DFC swaps and discuss its opportunities and challenges.
Additionally, the report showcases the unique opportunity DFC swaps present to alleviate debt strain while bolstering climate financing. The report dives into the key factors that drive successful DFC implementation, exploring the benefits and challenges faced by both debtors and creditors. Finally, it emphasizes strategies to enhance the impact of DFC swaps, paving the way for a more sustainable and equitable future.