ISLAMABAD- Pakistan is working with lender countries on a debt-for-natureswap program. Such an arrangement will help Pakistan with its debt reliefin return for binding commitments to achieve conservation targets, Bloomberglinkon Monday.

The Adviser on Climate Change to the Prime Minister, Malik Amin Aslam,said, “Four to five creditors will commit to an intent to engage for adebt-for-nature swap”. He said that an official letter of intent in thisregard can be expected to be announced on World Environment Day (5 June).——————————

He added that Pakistan is also hosting the World Environment Day this year,but did not give further details on the creditors. However, he said thatthe negotiations regarding the details were ongoing.

According to an International Monetary Fund (IMF) report released lastmonth, Pakistan owes the highest outstanding amount of bilateral debt toChina, with Japan following second, and trailed by the United Arab Emirates(UAE), France, and Germany.——————————

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The practice of debt swaps is not new, even in terms of achieving climategoals. The United Nations (UN) put a value of over $2.6 billion fordebt-for-climate and nature agreements, with some deals dating to as earlyas 1985. The practice has gained momentum and has become increasinglypopular after the coronavirus pandemic.

There is a worldwide effort to realign finance with the joint targets ofprotecting the natural world and reducing nations’ debt strains.

This is not the first major endeavor that Pakistan has undertaken for theenvironment this year. Pakistan has also announced plans to issue its firstgreen bond worth $500 million. The bonds are expected to be rolled outwithin a few weeks.