Redesigning debt swaps for a more sustainable future

The recent deal between Cabo Verde and its main creditor Portugal shows that a fresh approach to debt-for-climate-and-nature swaps is possible — and could be key to addressing the ‘triple crisis’ of unsustainable debt, climate change and biodiversity loss.

In this briefing, we outline the approach, which was proposed by IIED in 2020, and highlight six practical lessons that emerged from a pilot with Cabo Verde and Senegal.

IIED’s work on this project is now concluded, but the use of debt swaps for climate and nature has only just begun. We hope that, in sharing experiences from the pilot’s scoping and design process, this briefing will help to inform and encourage other low-income countries interested in exploring the potential of this innovative tool.