Glossary

Third parties, such as impact investors, buy bonds linked to climate goals, offering cheaper loan rates to the debtor country in exchange for lower-interest debt.

Funds allocated by a debtor country, directly or under international mechanisms, for climate action and environmental conservation.

An entity funding conservation or climate action projects.

Funder: Donor buys the debtor's debt at a lower rate, restructuring it in exchange for environmental commitments.
Guarantor: Donor acts as a credit enhancer, encouraging commercial investors to lend to the debtor for debt restructuring.

Debt is restructured in exchange for equity in climate-related projects, such as renewable energy, allowing creditors to hold stakes in income-generating projects.

The nominal or principal amount of the debt being forgiven or restructured, excluding interest.

The arrangement used for raising capital, managing risk, or facilitating debt exchanges.

Debt restructuring between one debtor and multiple creditors, typically involving multilateral development banks like ADB, World Bank, or IMF.

The discounted amount paid by an intermediary to acquire the debtor’s debt from the creditor.

An organisation or entity that acquires debt from a creditor at a discounted price.

A fund where communities repay loans in small amounts, and the money is reinvested into local climate projects instead of being returned directly to the creditor.

A debt restructuring arrangement involving three parties: the debtor country, creditor(s), and a third-party environmental organisation. The debtor country commits to using the debt relief for specific climate projects, with the third-party organisation managing the funds.