Debt-for-SDGs swaps in indebted countries: The right instrument to meet the funding gap?

Debt swaps refer to agreements between a creditor and a debtor, wherein the existing debt is replaced by a new instrument or commitment, entailing some financial relief for the debtor and a reallocation of cash flows towards targeted objectives.

This report on the implementation of debt swaps has been prepared by Banque Lazard of Paris on the request of the Commission (Directorate General International Partnerships). It is based on a large set of interviews conducted with Member-States, IFIs, MDBs, think tank and civil society representatives. The report makes an exhaustive description of the use of debt swaps, their potential but also the different constraints (technical or legal) they face. In conclusion, the report proposes for discussion different recommendations aiming to promote a Team Europe approach on debt swaps.