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Debt-for-nature swaps, instruments for a fair transition?

COP 28 side-event organised by 2DII.

🎯Explore with different types of financiers the optimal conditions for debt-for-nature swaps to be most effective.

 

According to the World Bank, 39 developing countries present a high risk of over-indebtedness or are already in this situation, compared to only 31 in 2018. At the same time, the impacts of climate change are increasingly significant in these countries, which are more strongly affected than developed countries.

To reach the required scale, sustainability-linked sovereign finance (such as debt-for-nature/climate swaps, sustainability-linked bonds) must be combined with credit enhancement mechanisms such as credit guarantees.

The improved ratings provided by guarantees allow vulnerable, lower-rated states to attract sufficient, lower-cost financing to ease debt service burdens and finance urgent climate and biodiversity programs.

It is possible to deploy credit enhancement for sovereign borrowing on a much larger scale among developing countries. These instruments represent only a fraction of the international financial institutions commitments.

This topic was discussed during the summit for a global financial pact held in Paris in June 2023. The main international financial institutions, including the African Development Bank and the MIGA, called for a coordinated approach to overcome the obstacles to deploying these solutions on a large scale.

The panel aims to discuss existing solutions for developing countries and to call for the mainstreaming of instruments to mobilize climate and environmental financing.

Moderation: Hélène Lanier, Managing Director –  2DII

Speakers:

Location:

Pavillion Francophonie (on site)

Flash the QR code to participate online:

 

 

08.12.23
Dubaï
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🎯Explore with different types of financiers the optimal conditions for debt-for-nature swaps to be most effective.

 

According to the World Bank, 39 developing countries present a high risk of over-indebtedness or are already in this situation, compared to only 31 in 2018. At the same time, the impacts of climate change are increasingly significant in these countries, which are more strongly affected than developed countries.

To reach the required scale, sustainability-linked sovereign finance (such as debt-for-nature/climate swaps, sustainability-linked bonds) must be combined with credit enhancement mechanisms such as credit guarantees.

The improved ratings provided by guarantees allow vulnerable, lower-rated states to attract sufficient, lower-cost financing to ease debt service burdens and finance urgent climate and biodiversity programs.

It is possible to deploy credit enhancement for sovereign borrowing on a much larger scale among developing countries. These instruments represent only a fraction of the international financial institutions commitments.

This topic was discussed during the summit for a global financial pact held in Paris in June 2023. The main international financial institutions, including the African Development Bank and the MIGA, called for a coordinated approach to overcome the obstacles to deploying these solutions on a large scale.

The panel aims to discuss existing solutions for developing countries and to call for the mainstreaming of instruments to mobilize climate and environmental financing.

Moderation: Hélène Lanier, Managing Director –  2DII

Speakers:

Location:

Pavillion Francophonie (on site)

Flash the QR code to participate online:

 

 

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2DII today announced it is transferring stewardship of the Paris Agreement Capital Transition Assessment (PACTA) to RMI, formerly Rocky Mountain Institute. PACTA measures financial portfolios' alignment with various climate scenarios, including those consistent with the Paris Agreement. Under RMI’s stewardship, PACTA will remain a free, independent, open-source methodology and tool, and will continue to provide the financial and supervisory community with forward-looking, science-based scenario analysis to help users make climate-aligned financing decisions. RMI will invest in scaling up PACTA’s usability and applicability in day-to-day investment decisions as well as reporting requirements.

Access the full press release here: https://2degrees-investing.org/2-investing-initiative-transfers-stewardship-of-pacta-to-rmi/In the coming weeks, we will update this website with additional information. For now, please note that all contact information remains unchanged.