By Libby George HAMBURG (Reuters) – An enquiry into Ecuador’s landmark debt-for-nature swap has not slowed work on the increasingly popular instruments, the president of the Inter-American Development Bank told Reuters. The bank expects to finalise its next swap with Barbados within two months and is continually working on new deals, IDB President Ilan Goldfajn said in an interview. “We’re getting proposals every day for debt-for-education, for debt-for-blue-economy, debt-for-health,” Goldfajn said, speaking on the sidelines of the Hamburg Sustainability Conference.
The swaps help debt-laden countries finance environment or social projects by exchanging existing debt for cheaper loans, typically with a credit guarantee from a multilateral development bank. The IDB’s independent oversight body is scrutinizing whether Ecuador’s “debt-for-nature” swap, which converted $1.6 billion of debt into cheaper lending, breached the IDB’s policies regarding transparency.
Goldfajn said he expected the investigators to send a mission to Ecuador. “From our point of view, the transaction went very well,” he said. The bank and its partners, he said, would focus on ensuring the estimated $1 billion in savings had maximum impact.
Goldfajn declined to outline the size of the Barbados swap, which he expects will be closed “in a couple of months.” In July, the bank and the European Investment Bank finalised a $300 million guarantee that would channel savings towards wate.