Debt Swaps Won’t Save Us: The Urgent Need for Debt Cancellation and Grant Based Climate Finance

ActionAid has joined the Asian and Pacific Movement on Debt and Development (APMDD), Latindadd, Eurodad, Debt Justice, Christian Aid and Climate & Community Institute in calling out debt swaps and reiterating calls for debt cancellation and grant based climate finance.

There is a vicious cycle between the debt and climate crises, each reinforcing the other. It is thus profoundly contradictory that more than two-thirds of climate finance arrives in the form of loans that serve to exacerbate this debt crisis, forcing countries into actions that entrench the climate crisis. 

Debt swaps for climate and conservation goals have experienced a resurgence in recent years. While they are presented as a dual solution for debt and climate issues, debt swaps fall short in practice and pose risks that threaten to harm Global South countries and communities. Instead of debt swaps, we need urgent debt cancellation and grant-based climate finance.

Download this short three-page briefing (below) to read more.