ESG & Investing
Colombia Turns Down Debt-for-Nature Deals Over Ratings Anxiety
- The deal could send the ‘wrong message’ to the market
- Colombia needs to fund a massive green overhaul of its economy
Frailejon plants grow at the Chingaza National Natural Park in the northeast of Bogota, Cundinamarca department, Colombia.
Photographer: Nicolo Filippo Rosso/BloombergThis article is for subscribers only.
Colombia has been rejecting offers to do a debt-for-nature swap over fears such a deal could impact its sovereign credit rating, according to the country’s former environment minister.
The transactions, which have gained traction in a number of developing countries, are designed to free up funds to finance the transition to cleaner energy or to protect nature. In the arrangements, countries refinance a portion of their debt on better terms and allocate savings to environmental projects.