2023-Public-Sector-Perspectives

increasing supply and demand of carbon offsets could boost the size of the market to $50-to- over $100 billion by 2030. Most future supply of carbon offsets is likely to originate from nature- based projects over the next ten years, absent technical innovations in carbon sequestration. Debt for nature swaps The concept of debt-for-nature swaps was first introduced in 1984 by Thomas Lovejoy, vice president of the World Wildlife Fund, in response to the deteriorating tropical rain forests and mounting debt obligations in developing countries, especially in Latin America. Through a debt-for-nature swap, the debtor country’s debt stock is reduced in exchange for commitments of the debtor government to protect nature in varying forms. Since its inception, debt-for-nature swaps have been applied in over 30 countries across all continents. From 1987 to 2015, the total value of debt restructured under debt-for-nature swap agreements was over US$2.6 billion worldwide, resulting in about US$1.2 billion of transfers to conservation projects. Even though there was a decline of the use of debt-for-nature swaps in the 2000s, higher infrastructure spending and COVID-19 have given renewed opportunities to these transactions, especially in Belt Road Initiative (BRI) countries, which cover some of the world’s most biodiverse countries. Blended finance Blended finance refers to the strategic use of official funds including concessional tools to mobilize additional capital flows (public and/ or private) to emerging and frontier markets. It guarantees risk-adjusted returns on private investments directed to high-development impact sectors and is characterized by being leveraged (use of development or philanthropic funds to attract capital into deals), generating impact (investments that drive ESG progress) and providing returns in line with market expectations based on real and perceived risks. 82 Congo Basin Maintains High Levels of Biodiversity and Natural Resources That Need to be Managed, Maintained and Monetized