"Debt-for-nature swaps" are just "financial transactions" from which a part of a nation's (Developing nation) foreign debt is forgiven. This is done in exchange of "local investments" for the purpose of environmental conservation measures.
<u>Explanation:</u>
The model for "debt-for-nature swaps", was outlined in the EAI (Enterprise for the Americas Initiative), was extended in the "Tropical Forest Conservation Act" (TFCA) to include the countries present around the world with 'tropical forests'.
With the help of the program, "debt can be restructured" only in eligible countries, and 'funds' generated through this transactions are used to support programs for "conserving tropical forests" within the 'debtor country'.
124.8 million dollars has been spent under the 'TFCA' to restructure loan agreements in '13 countries' and nearly 218.4 million dollars in 'local currency' will be generated in the next 12-26 years for 'tropical forest conservation projects'.
Thus, "debt for nature swaps" encourages the protection of "tropical rain forest".
