Vice President Yemi Osinbajo has proposed a Debt-For-Climate Swap deal to achieve a just and equitable energy transition for Africa.
He said the swap deal, if approved, would significantly advance the course of global net-zero emissions targets and facilitate energy access and the development of African countries.
Osinbajo made the call during a lecture on a just and equitable energy transition for Africa at the Center for Global Development in Washington D.C, USA, according to a statement by his spokesman, Laolu Akande, on Friday.
The statement was titled, ‘In US Forum lecture, Osinbajo advocates Debt-for-Climate swaps, greater participation in global carbon market for African nations’.
Explaining the DFC concept Osinbajo said, “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 programs.
“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.”
According to him, the debt for climate swap deal is a win-win for both creditor/developed nations and Africa.