African nations eye debt-for-climate swaps as IMF takes an interest

Cli­mate vul­ner­a­ble nations in Africa are show­ing grow­ing inter­est in debt-for-cli­mate swaps to address bal­loon­ing debt and spur cli­mate invest­ments. Increas­ing­ly, they have the ear of finan­cial institutions.Today, 58% of the world’s poor­est coun­tries are in debt dis­tress or at high risk of it. In sub-Saha­ran Africa, Covid-19 has squeezed bud­gets and pushed aver­age debt lev­els above 60% of GDP.
Helene Gichen­je is the Commonwealth’s region­al cli­mate finance advis­er for Africa. Russia’s war in Ukraine and ris­ing glob­al infla­tion “are like­ly to sig­nif­i­cant­ly wors­en the debt cri­sis,” she said at Africa Cli­mate Week in Gabon on Wednesday.
High lev­els of debt repay­ments and a shrink­ing fis­cal space have pre­vent­ed much-need­ed invest­ments in cli­mate resilience, Gichen­je said. And cli­mate vul­ner­a­bil­i­ty is dri­ving up the cost of access­ing capital.
“There is dan­ger that the vul­ner­a­ble devel­op­ing coun­tries will enter a vicious cycle,” she said.
The IMF, the Green Cli­mate Fund and the African Devel­op­ment Bank increas­ing­ly sup­port debt-for-cli­mate swaps as a solution.
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Debt swaps mean that instead of mak­ing pay­ments to cred­i­tors on out­stand­ing loans, debtor coun­tries can use that mon­ey in local cur­ren­cy to invest in cli­mate projects under terms agreed with creditors.
This form of debt relief has been around for 30 years but hasn’t seen much use. Despite some pos­i­tive exam­ples, includ­ing a debt-for-nature swap in the Sey­chelles, the IMF esti­mates that only up to $4bn worth of debt has been for­giv­en under swap programmes.
Fis­cal space
Cabo Verde, Eswa­ti­ni and Kenya are among nations look­ing into how to make debt-for-cli­mate swaps work for them.
“Debt swaps could be a good instru­ment to give us space in our bud­get for new invest­ments in renew­able ener­gy and the blue and green econ­o­my,” Soeli San­tos, trea­sury direc­tor at Cabo Verde’s min­istry of finance, told the event.
In exchange for par­tial debt for­give­ness, Cabo Verde would, for exam­ple, meet some of the com­mit­ments made in its 2030 cli­mate plan, San­tos said.
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The prin­ci­ple gen­er­at­ed sig­nif­i­cant inter­est dur­ing a meet­ing of African cli­mate experts in Ethiopia last month as part of dis­cus­sion on cli­mate finance.
The Egypt­ian Cop27 pres­i­den­cy is con­sid­er­ing launch­ing a debt swap frame­work at the cli­mate sum­mit in November.
And a num­ber of finan­cial insti­tu­tions have start­ed to explore how to scale up the relief swaps can provide.
IMF guidance
Last month, an IMF work­ing paper, co-authored by the fund’s deputy chief in the debt depart­ment, con­clud­ed that, in some cir­cum­stances, debt-for-cli­mate swaps made eco­nom­ic sense.
“There is a space for debt-for-cli­mate swaps in the broad­er cli­mate finance toolk­it,” said IMF senior econ­o­mist Vimal Thakoor. “In many coun­tries, grants are not forth­com­ing nec­es­sar­i­ly and debt relief is not nec­es­sar­i­ly on the table either.”
How­ev­er, in coun­tries with high lev­els of debt dis­tress, swaps should not replace broad­er debt restruc­tur­ing pro­grammes, the paper argues.
Scal­ing up debt swaps requires bring­ing on board a large pool of pri­vate and offi­cial coun­try cred­i­tors. That is no small task but some­thing cred­i­tors might be will­ing to do to sup­port cli­mate goals, it added.
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Although the paper hasn’t been endorsed by the IMF’s board and man­age­ment, Paul Steele, chief econ­o­mist at the Inter­na­tion­al Insti­tute for Envi­ron­ment and Devel­op­ment (IIED), told Cli­mate Home it could be “poten­tial­ly game-chang­ing” should it gain polit­i­cal backing.
“The IMF has the cred­i­bil­i­ty and the most lever­age to bring togeth­er cred­i­tors in a way that would allow them to take for­ward this kind of inter­na­tion­al ini­tia­tive,” he said. “An inter­na­tion­al ini­tia­tive on debt swaps for cli­mate and nature out­comes at Cop27 could break the log­jam on cli­mate finance.”
The IMF is not alone in explor­ing options to move this forward.
Andrey Chicherin, head of inno­va­tion and tech­nol­o­gy trans­fer at the Green Cli­mate Fund, told the meet­ing that the fund could act as an inter­me­di­ary in debt swaps by design­ing adap­ta­tion and car­bon-cut­ting pro­grammes and ensure their deliv­ery against the fund’s ver­i­fi­ca­tion sys­tems and safeguards.
The African Devel­op­ment Bank is final­is­ing a fea­si­bil­i­ty study on scal­ing up debt-for-cli­mate and nature swaps in Africa. This is to inform advice to nations on debt relief options.

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Jabeur makes African history with Wimbledon final spot against Rybakina — Inquirer Sports

Tunisia’s Ons Jabeur returns the ball against Germany’s Tat­jana Maria dur­ing their women’s sin­gles semi final ten­nis match on the eleventh day of the 2022 Wim­ble­don Cham­pi­onships at The All Eng­land Ten­nis Club in Wim­ble­don, south­west Lon­don, on July 7, 2022. (AFP)
LONDON – Ons Jabeur became the first African woman in the Open era to reach a Grand Slam sin­gles final on Thurs­day when she defeat­ed close friend Tat­jana Maria in the Wim­ble­don semi-finals.
The 27-year-old world num­ber two from Tunisia tri­umphed 6–2, 3–6, 6–1 and will face Ele­na Rybak­i­na in Saturday’s cham­pi­onship match.
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Russ­ian-born Rybak­i­na, rep­re­sent­ing Kaza­khstan, knocked out 2019 cham­pi­on Simona Halep 6–3, 6–3.
“I’m a proud Tunisian woman stand­ing here,” said Jabeur, who was the first Arab play­er to make a Slam semi-final.FEATURED STORIES
Before Thurs­day, South Africans Irene Bow­der Pea­cock, at the 1927 French Open, and Renee Schu­ur­man, in the 1959 Aus­tralian Open, were the only African women to have reached a Slam sin­gles final.
“It’s a dream come true from years of work and sac­ri­fice. I’m hap­py that’s paid off and I’ll con­tin­ue for one more match,” said Jabeur.
“Phys­i­cal­ly, Tat­jana is a beast, she doesn’t give up — I thought she would give up — her touch, her serve and every­thing on the court is impres­sive. I hope she con­tin­ues this way. Let’s not play again, I’m good for now.
“I know in Tunisia they are going crazy right now. I want to see more Arab and African play­ers on the tour. I love the game and I want to share the expe­ri­ence with them.”
Jabeur coast­ed through the first set against moth­er-of-two Maria with breaks in the third and sev­enth games.
The Tunisian fired 15 win­ners to her opponent’s six in the first set while not fac­ing a sin­gle break point.
How­ev­er, Maria, described by Jabeur as her “bar­be­cue bud­dy”, did man­age to final­ly break through for 3–1 in the sec­ond set off the back of a series of del­i­cate slices.
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Jabeur’s 17 unforced errors in the sec­ond set com­pared to the six of the more accu­rate Ger­man, who lev­elled the contest.
But there was to be no upset win as the 103rd-ranked Maria’s chal­lenge was quashed.
Jabeur secured a dou­ble break for a 5–0 advan­tage before secur­ing her place in his­to­ry on a sec­ond match point.
‘Amaz­ing match’
Rybak­i­na over­pow­ered for­mer cham­pi­on Halep, break­ing the Roman­ian four times in a dom­i­nant dis­play on Cen­tre Court.
“It was real­ly good — today I was men­tal­ly pre­pared and did every­thing I could and it was an amaz­ing match,” said the 23-year-old.
“I think it’s going to be a great match (against Jabeur). She’s a great play­er, very tricky play­er. It’s not going to be easy to play against her drop shots and volleys.”
For­mer world num­ber one Halep had not lost a set com­ing into Thursday’s match but was imme­di­ate­ly under pres­sure against the big-serv­ing 17th seed.
Rybak­i­na, who stands six feet (1.84 metres) tall, raced into a 3–0 lead with an ear­ly break of serve and had break points in all of Halep’s ser­vice games in the first set.
Halep, seed­ed one place above her oppo­nent, did well to stay in touch but failed to carve out any break points of her own in the first set.
Rybak­i­na, the first woman rep­re­sent­ing Kaza­khstan to reach a Grand Slam semi-final, showed no mer­cy at the start of the sec­ond set, break­ing again to estab­lish an iron grip. 

Halep broke to love in the fourth game to estab­lish a foothold but a dou­ble fault in the fol­low­ing game hand­ed the ini­tia­tive back to her opponent.
Rybak­i­na, the ace leader in the women’s tour­na­ment, sealed an impres­sive win on her first match point with a back­hand win­ner down the line to break Halep again, wrap­ping up the match in 76 minutes.
The 23-year-old switched her nation­al­i­ty to Kaza­khstan in 2018 to take advan­tage of greater finan­cial help.
Russ­ian and Belaru­sian play­ers were banned from this year’s Wim­ble­don fol­low­ing the inva­sion of Ukraine.

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