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November 2, 2023

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This paper explores possibilities of integrating the proceeds of natural capital into sovereign debt instruments.

This paper explores innovative pathways and new revenue streams for debt-distressed Low-and Middle-Income Countries (LMICs) to leverage their renewable natural capital as a way of enhancing creditworthiness and improving their socio-economic development.

It identifies some options these countries might have – including new revenue streams from natural assets, which could be developed and integrated into countries’ debt management frameworks and/or specific sovereign debt instruments in order to enhance their credit ratings and thereby unlock their development potential.

The central purpose of this paper is not to prescribe solutions but to ignite a wider discussion on potential pathways for LMICs to capitalise on their renewable natural capital in a sustainable manner. The goal being to enhance these countries’ creditworthiness, support their public finances and provide better public services and prosperity to citizens.

NatureFinance and the Sustainability-linked Sovereign Debt Hub (SSDH) present this paper as a first step and invitation to join us in igniting a wider ecosystem discussion on the subject.

If interested in further exploring this area and/ or specific subject, please do not hesitate to reach out.

Contact and more information:

Gregor Pipan – Technical Lead, Sustainability-linked Sovereign Debt Hub: gregor.pipan@naturefinance.net