A task force has been formed to advance the Economic Commission for Latin America and the Caribbean’s (ECLAC) debt for climate adaptation swap initiative.
First presented at ECLAC’s Caribbean Development Roundtable in Saint Kitts and Nevis in April 2016, the Debt Swap initiative is “intended to address at once the crippling debt of the Caribbean and their need to generate the resources needed to finance resilience building measures.”
ECLAC also said the Debt Swap is an innovative strategy that involves harnessing concessionary flows to transform the debt of the region into a source of investment in resilience.
At the same time, “re-energising growth and promoting economic transformation in the economies of the subregion through investment in adaptation projects and green industries.” Set up by ECLAC’s Caribbean sub-regional office, the Debt Swap task force was inaugurated at a meeting held in Port of Spain two Fridays ago.
Participants sought clarification on the mechanics of the debt swap arrangement, examining closely the likely impact on various stakeholders, and exploring the feasibility of pursuing economic diversification with a view to producing competitive exports that generate foreign exchange and stimulate growth in the economy.
ECLAC said consideration was given to the need to develop a portfolio of green projects and strategies to capitalise the Caribbean Resilience Fund which should serve as the source of financing. “Challenges in addressing domestic debt were also raised. Participants also highlighted that it may be more beneficial to focus on the multilateral debt in the first instance, since securing haircuts on the debt from private creditors might be less easy to sell.