July 30, 2025—A multibillion-dollar regional “debt-for-resilience” facility, supported by the Inter-American Development Bank (IDB), the World Bank, The Development Bank of Latin America and the Caribbean, and the Caribbean Development Bank, will pilot in Barbados before its official inauguration at the 30th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP30) in Brazil. 

The facility will enable countries to refinance expensive sovereign debt with lower-interest bonds, generating savings that can be reallocated to improve social infrastructure, advance environmental conservation, and foster climate resilience. Its framework marks a significant step toward streamlining the legal complexities of debt swap arrangements while preserving effectiveness, making the process more accessible to participating countries.

Barbados has committed to being the test case for a USD2–3 billion debt swap mechanism aimed at expanding fiscal flexibility and generating investment for climate, environmental, and social sectors. Building on its successful debt swaps in 2022 and 2024, the country has gained recognition from international development banks as a promising location for further debt restructuring initiatives.

In 2022, Barbados implemented the Marine Spatial Plan valued at US$ 150 million as part of its debt conversion agreement with The Nature Conservancy and IDB. This created long-term sustainable financing for marine conservation, protecting up to 30% of its exclusive economic zone and territorial sea. 

The country also completed its debt-for-climate swap in 2024 through its New South Coast Water Reclamation and Re-use Facility, gaining the world’s first debt restructuring focus on climate resilience measures. The program allocates USD165 million toward climate-resilient water infrastructure, sustainable agriculture, and environmental safeguards to support the island’s adaptation to climate change.

“We have seen in the case of Barbados and a number of other countries, once you get an institution to do the guarantee and to take up some of the debt, you are in a good place to advance your developmental projects. So in Barbados, they took debt swaps, and they were able to fix the sewage infrastructure in the southern part of the island. They were able to do a coastal program, in terms of coastal regeneration.” Geneva Oliveria, CVF-V20 Secretariat’s Deputy Director for International Financial Reform and Trade, shared during one of the learning sessions of the CVF Youth Fellowship.

This year, Barbados steps forward once again, forging bolder global solutions to the debt burdens that limit climate action in the world’s most vulnerable economies. IDB officials seek scheduled country visits to map out pipeline projects for the regional “debt-for-resilience” facility prototype.

Slated for launch at COP30, the regional “debt-for-resilience” initiative seeks to restructure a total of USD10 billion sovereign debt across 15 Caribbean countries, unlocking USD2 billion for adaptation and resilience-building investments.

Initiatives like debt-for-climate swaps expands access of the world’s most vulnerable to equity, low-cost convertible loans, first-loss capital, and guarantees critical in investing for climate action and other development goals.