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Max Planck Encyclopedia of Public International Law [MPEPIL]

Debt-for-Nature Swaps

Daniel B Magraw Jr, Grace Menck Figueroa

Subject(s):
Sustainable development — Debts — Developing countries — Natural resources — Biodiversity — Climate change — Marine environment, protection

Published under the auspices of the Max Planck Foundation for International Peace and the Rule of Law under the direction of Rüdiger Wolfrum.

1 Debt-for-nature swaps, invented in the mid-1980s, involve creative alternative funding mechanisms to finance sustainable development projects in low-income countries. Although various financial arrangements may be used, a debt-for-nature swap (‘DNS’) basically leverages the debt of a low-income country to obtain a commitment from that country to protect nature and possibly to help finance that protection; sovereign debt is forgiven in return for the environmental commitment, and the savings in debt servicing are invested in environmental conservation and...
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