Debt-for-climate swaps are a key way of helping developing nations, including some in the Middle East, to finance measures to cope with climate change, delegates at Cop27 were told on Wednesday. In a panel discussion at the Sharm El Sheikh conference, attendees heard that there was a need for greater near-term investment in the region in its adaptation to climate change. Debt-for-climate swaps involve offering debt relief in return for the debtor nation investing in climate-related projects at home. The Climate Finance in the Middle East: Gaps and Opportunities discussion was hosted by the Office of the UAE Special Envoy for Climate Change and moderated by the Anwar Gargash Diplomatic Academy, a post-graduate university in Abu Dhabi. "It is a win-win. You fix the debt issue that developing countries are suffering from, but you also get climate action," Moustafa Bayoumi, a research fellow at the academy, told the event. He said there was a need in the Middle East ― which he described as having a high debt-to-GDP ratio ― to look at ways of securing climate investments that "would work right now". While Mr Bayoumi said no country in the region had yet struck a deal for debt-for-climate swaps, some had experience of debt-for-development swaps, and they could learn from other nations, such as the Seychelles, Belize and the Bahamas, that had "gone for debt-for-climate swaps". "They’re all positive examples that are coming up right now," he said. In the region, he said, the focus should be specifically on debt-for-adaptation swaps, where adaptation refers to measures to deal with climate change as it happens. "Mitigation is still attracting finance. Our issue is going to be with adaptation. It’s not receiving enough funding," Mr Bayoumi said. "The impacts are happening right now. We see them happening. We cannot wait any further for the finance to be delivered. "What do the donors get out of it? The idea there’s a looming recession that’s about to hit developed countries. Developing countries are very much in debt. They will probably not be able to pay their debts. "So why not relieve them from that debt in exchange for action that they are willing to do? Let’s give them this opportunity to take action." He said it was important to "utilise all the tools that we have", including issuing green bonds and the mobilisation of sovereign wealth funds, but debt-for-climate and debt-for-conservation swaps were nonetheless "a huge opportunity". Analysis suggests that an area the size of the United States could be conserved as a result of debt-for-conservation swaps involving the world’s oceans, he said. Amine Bel Hadj Soulami, the Middle East and Africa chief executive of BNP Paribas, said the <a href="https://www.thenationalnews.com/business/energy/2022/10/06/saudi-arabias-pif-raises-3bn-through-debut-green-bond/" target="_blank">success of a green bond issued in October</a> by Saudi Arabia’s Public Investment Fund was a positive sign. "Only 10 per cent of the buyers of the bonds were actually allocated to GCC investors," he told delegates. "So 90 per cent was invested by investors outside the GCC, which is a strong sign of confidence by the international community on the ESG (environmental, social and governance) credentials." Much of the investment came from Europe and Asia, Mr Soulami said, which he described as being another positive sign. Some media reports, however, suggest that there has been little scrutiny regarding how green the bonds actually are. "What I'm saying [is that this is] an illustration ... that attracting investment to the region, especially when it's green, means that you have to attract investors, mostly in Europe, who are extremely keen on looking at the climate element, ESG transition," he said. "It's a super-optimistic sign that it can be done at a time when the markets are very difficult. The bond market has been almost shut for a part of this year. "It's an optimistic sign but also a lesson that you can attract in the region international funds to develop the projects around the energy transition and ESG even with foreign investors, if you are credible when you have strong leadership ... and demonstrate you are capable of delivering on those projects." Climate finance as a whole is a subject that has emerged only in the "last five or six years", Mr Soulami said, but has over that time enjoyed "extremely strong acceleration". "We’re very happy to see how the leadership of countries in the region have also put it at the top of their agenda," he said. Another panel member, Raidan Al Saqqaf, a UN economist based in Abu Dhabi, said there was an increase in bilateral funding for sustainable development, but much of this focuses on humanitarian projects, for example, and there was a lack of support for climate-related goals. "The funding related to the climate … is quite minuscule. And that’s a problem because that means tomorrow’s challenges induced by natural disasters and other related issues will not have the funding required," he said. Dr Al Saqqaf described how the UN had developed its Integrated National Financing Framework as a way of ensuring "which funding can be unlocked to do what". He also said there was a particular need to channel funding into adaptation measures because mitigation was already receiving support. "We know, for instance, that the economic arguments for mitigation, for investments in solar energy, for a reduction in emissions, has more interest from the private sector, so how can we mobilise that investment?" he said. "Therefore we should talk to donors, to philanthropists, to invest more in adaptation, because we have other funding resources that we can unlock for mitigation."