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COP28: IMF mulls debt-for-climate swap deal for Nigeria, other countries

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The International Monetary Fund (IMF) is considering a debt-to-climate swap deal to help indebted countries reduce their debt in exchange for protecting the ecosystem. Kristalina Georgieva, Managing Director of IMF, disclosed this during an interview at COP28, stating that the institution is yet to have a clear mechanism for the deal’s operation. She emphasized that decarbonization is challenging for countries with high levels of indebtedness. “Climate is one problem, and debt is another problem for the same countries. We are very interested in debt for climate swaps,” Georgieva said. She explained the IMF’s intention to establish key performance indicators, enabling countries to project their climate actions forward and receive debt relief to fund these actions. Georgieva highlighted that while the number of countries in debt stress is relatively small, the number of countries close to debt distress is significant, with levels projected to increase in the coming years. African countries, including Nigeria, are seeking debt relief and may benefit from the proposed initiative to access additional climate funding by projecting their climate actions when the deal is activated.

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