South Africa’s Deputy Finance Minister David Masondo floated an interesting idea recently. He suggested investors forgive some $10 billion of the country’s sovereign debt in exchange for the country’s national power utility, Eskom Holdings, going greener. “High levels of indebtedness can hold up what is urgently needed — an acceleration of the energy transition,” Masondo said last month. Such a deal in South Africa would create “a blueprint for other transitioning middle-income, coal-dependent economies,” Bloomberg News reported him saying.
There are concerns about the repercussions of such a debt-for-climate plan, which he insisted does not imply a haircut for creditors.
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