Zambia receives ‘debt to nature’ proposal for restructuring from WWF |

LONDON, 18 january (Reuters) – Zambia 13 billion received a “debt-for-nature swap” as part of the dollar restructuring talks, which is not part of the current negotiations, but could set an environmentally-friendly precedent for securing security. for other debt crises, if included as a result.

Zambia has become a test case for the G20-led “Common Framework” restructuring tool launched during the COVID-19 pandemic, but has failed to meet the required debt obligations with some of its major creditors. free differences of opinion on its implementation indicate that progress is slow.

The government confirmed to Reuters on Wednesday a previously undisclosed detail – the World Wildlife Fund (WWF) last year presented a plan that conservation pledges could be part of the deal.

In its simplest form, debt-to-nature swaps are usually multilateral development bank’s in exchange for protecting fragile ecosystems credit with the help of guarantees, expensive bonds or loans with cheaper financing substitute does.

That’s tens of millions in ocean conservation to both Belize and the Seychelles dollars It’s an approach that helps ensure the safety of the waste stream, and conservationists see Zambia, known for its famous Victoria Falls, as an obvious candidate.

Its wide national The parks are home or migration routes for some of Africa’s most impressive wildlife, including lions and elephants. However, their habitat is threatened by climate change and deforestation.

“Finance and National Ministry of Planning regarding consideration of debt-to-nature swaps from World Wildlife Fund offer received,” the ministry said in an emailed response to whether it was looking at the swap.

The idea is not included in the International Monetary Fund’s current debt sustainability analysis, but that won’t prevent it from being added later, especially if creditors make it clear they can support it.

“We will consider debt restructuring options within the framework of the (G20 Common Framework) that are within the parameters of the DSA (debt sustainability analysis) and are acceptable to all parties,” the ministry’s response added.

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Nachilala Nkombo, country head of WWF Zambia, told Reuters that 750 million for green projects with the government – 1 billion dollars between funds The most recent negotiations on the proposal, which he estimated to get, took place last month.

While some of Zambia’s private sector bondholders are expected to be open to the idea, given that negotiations have already dragged on for two years, China, France and where other major ‘formal sector’ lenders stand is unknown.

Sri Lanka, another Common Framework restructuring country, has said it wants to swap natural debt, although Zambia still hopes to set a precedent by concluding its deal this year.

Some debt swaps have faced criticism in the past for having a negative impact on local communities or for being less beneficial than expected, but recent deals have tried to stick to the intended goals.

IMF head Kristalina Georgiyeva to Zambia in two weeks trip will do. His visit will coincide with the release of electricity to mining companies due to critically low water levels in the hydroelectric dams that provide most of the country’s electricity.

Victoria Falls, the main tourist attraction of the country, has sometimes decreased by a drop in recent years. Farmers have seen yields plummet, poaching remains a scourge and deforestation rates are among the worst in the world.

“This is someone’s business, someone’s food and the future of the country is at stake,” Nkombo said, noting the threat to the country’s elephants, lions and other vulnerable species.

“If we lose them, the impact would go far beyond Zambia, it would be a global loss.”

Reuters Graphics are edited by Elaine Hardcastle and Aurora Ellis

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2023-01-19 06:16:55
Source – reuters

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