Vice President Yemi Osinbajo has proposed a debt-for-climate deal for African countries in order to significantly advance the course of global net-zero emissions targets.
Osinbajo made the proposal on Thursday during a lecture on a just and equitable energy transition for Africa at the Centre for Global Development in Washington D.C. United States of America.
According to a release by his spokesman, Laolu Akande, Osinbajo explained that the: “Debt for climate swaps is a type of debt swap where bilateral or multilateral debt is forgiven by creditors in exchange for a commitment by the debtor to use the outstanding debt service payments for national climate action programmes.
“Typically, the creditor country or institution agrees to forgive part of a debt, if the debtor country would pay the avoided debt service payment in a local currency into an escrow or any other transparent fund and the funds must then be used for agreed climate projects in the debtor country.”
Justifying the rationale behind such a debt swap deal, the Vice President submitted that the commitment to it would “increase the fiscal space for climate-related investments and reduce the debt burden for participating developing countries.”