Debt-for-nature Swap PACTS To be INKED with CREDITORS on 5Th: Gul

STATE Minister for Climate Zartaj Gul has said that Pakistan is all set to sign agreements with Germany, Italy, Canada and the United Kingdom on June 5 for debt relief in exchange for investments in environmental conservation efforts across the country.

She said on Monday that signing of the debt-for-nature agreement is part of a line-up of events for World Environment Day on June 5, which Pakistan will be hosting for the first time.

She said that Pakistan has assured creditors of its commitment to combat climate change in exchange for “the amount of loans they will forgive.”

“We will not pay back the debts, but against that part of the loan, we will make progress on the restoration of the natural environment, whether it will be biodiversity conservation or restoration, or be it green jobs,” Gul added. She said the exact amount for the DFN agreement would be determined “after the final ratification of the agreement by the respective governments.”

“These are long standing and non-payable loans under the current circumstances,” Gul said, adding: “Nature-based solutions in exchange for debt relief will not only reduce Pakistan’s debt burden but will also benefit the environment in the country and the region as a whole.” Gul said Pakistan had qualified for the DFN deal based on its “three-year performance” in conservation efforts, including the prestigious 10 Billion Tree Tsunami program launched by Prime Minister Imran Khan in 2018 which aims to counter extreme weather conditions in Pakistan that scientists link to climate change.

“During the last three years, we have shown performance through the Billion Tree Tsunami, Clean Green Pakistan, plastic bag ban, recharge Pakistan, ecosystem restoration, and [by] setting up 23 national parks,” Gul said, naming various climate initiatives taken by the government.

Pakistan is working with lender countries on a debtfor-nature swap programme, which would see debt relief in return for binding commitments to achieve conservation targets, with lender countries agreeing to reduce Pakistan’s outstanding payments and channelling the money into conservation and climate-related expenses instead.

Pakistan owes nearly $11.54 billion to the Paris Club of country lenders, including $1.42 billion to Germany, $175 million to Italy, $5 million to the UK, and $403 million to Canada.