INSUBCONTINENT EXCLUSIVE:
the United Nations COP27 summit in Egypt, Reuters reported citing people familiar with the matter.According to the news report, such
agreements are part of efforts to address an intractable quandary facing world leaders as to who would pay the bill for the global fight
against biodiversity loss and climate change.Sri Lanka is among several other countries including Ecuador and Cape Verde exploring the
possibility of striking debt-for-nature swap deals to ease the debt problems.A debt-for-nature swap deal is a bilateral agreement, which
involves purchasing foreign debt, converting that debt into local currency and using the proceeds to fund conservation activities
The key to the transaction lies in the willingness of commercial banks (or governments) to sell debt at less than the full value of the
million of its debt refinanced more cheaply, freeing up the savings conservation efforts.At that level, it would be the biggest
debt-for-nature swap struck to date, yet it could eventually be trumped by others, including Sri Lanka, which has been discussing a deal of
up to $1 billion according to people familiar with those talks, the news agency said further.Cape Verde, an archipelago nation off West
Africa, is meanwhile close to a nature swap that could be worth up to USD 200 million, said Jean-Paul Adam, a former Seychelles government
official who now works for the U.N
Economic Commission for Africa (UNECA), providing financing advice to governments.Reuters stated that Ecuadorian, Sri Lankan and Cape Verde
governments did not respond to requests for comment for this story, although Ecuadorian President Guillermo Lasso said in an local newspaper
12 that its Galapagos swap deal could be wrapped up in four or five weeks.The potential deals for Ecuador, Sri Lanka and Cape Verde,
reported here in detail for the first time, point to a jump in interest for this form of financial alchemy, which was conceived decades ago
but has remained something of a niche area until recently.Only three of over 140 or so swaps struck over the past 35 years - the first in
1987 - had a value of more than a quarter of a billion dollars, according to global data published by the African Development Bank
The average size was $26.6 million.The combined value of swap deals to date is $3.7 billion, according to the data
distressed levels.Advocates say that those current debt problems, combined with the growing political will and the recent successful swap
deals in the Seychelles, Belize and Barbados, mean a swathe of other countries are now exploring the model.-with inputs from Reuters
This article first appeared/also appeared in https://adaderana.lk
