Debt Swap

A debt swap is a financial arrangement where a debtor, often a government or organization, agrees to reduce its debt obligations in exchange for commitments that benefit public welfare or environmental goals. For example, a country might reduce its external debt in exchange for funding that supports healthcare, education, or conservation projects. This strategy helps improve the debtor's financial stability while promoting sustainable development. Essentially, it’s a mutual agreement that transforms financial debt into positive, development-oriented actions, benefiting both parties involved.