Minister: Colombia and Germany in discussions over debt swaps

By Libby George

HAMBURG - On Monday, the Foreign Minister of Colombia, Luis Gilberto Murillo, said that the country is in discussions with Germany about a debt for nature swap to help fund a $40 billion plan by the country to move away from fossil fuels while protecting the environment.

Last month, Colombia launched a new portfolio of investments for its climate-adaptation plans. It hopes to attract $40 billion.

Murillo stated that German Chancellor Olaf Scholz and Colombian President Gustavo Petro had been in discussions for "some sort of climate natural debt exchange with Germany...for quite some time."

He declined to provide a timetable for the possible agreement but said that there was "tremendous" political will.

Debt-for nature deals are a popular way to fund conservation in emerging economies. Bonds or loans are purchased and then replaced by cheaper debt. Savings are used for environmental protection.

Murillo refused to give a dollar amount for the possible swap with Germany.

Last week, Colombia's environment minister Susana Muhamad said that the country hoped to raise $40 billion through a variety of sources including private sector investments, credit lines provided by public banks, and other instruments.

Murillo called on the international community, as well, to do more in order to help developing countries respond to the climate crises. He added that the high debt burden of Colombia, along with its high debt costs, makes it difficult for climate initiatives to be funded.

He called on the International Monetary Fund to increase funding for environmental projects, and to take similar action to that taken in response to COVID-19, the pandemic outbreak, where $650 billion of IMF currency was made available to boost global liquidity.

He said, "But it would even be better if we created a special financial structure to do this."

VENEZUELA DIALOGUE

Colombia and Brazil are leading a regional effort to ensure that the Venezuelan elections in July reflected the will of voters. Bogota asked Venezuela to release the voting totals, not aggregates that Caracas claims show President Nicolas Maduro has won reelection.

Murillo stated that Colombia was focused on facilitating dialogue. It had diplomatic relations and "channels of communication" with Maria Corina Machado and the opposition. She is a popular politician banned from running for public office.

Murillo added: "We've been very discrete in our approach to Venezuela. We have a very calm diplomacy."

(source: Reuters)