LIMA, Sept 9 (NNN-ANDINA) — Peru promotes the conservation of tropical forests and environmental projects through debt swap for an amount exceeding US$19 million, the Ministry of Economy and Finance (MEF) disclosed.
The MEF —representing the Republic of Peru within the framework of the Tropical Forest and Coral Reef Conservation Act (TFCCA) of the Government of the United States of America— signed the Debt Swap Agreement and the Forest Conservation Agreement.
These agreements formalize Peru’s Foreign Debt Swap with the United States for a total amount of US$19,577,440 with the aim of promoting the conservation of tropical forests and environmental projects.
The ceremony marking the signing of these agreements between the Governments of Peru and the United States was led by Peruvian Economy-Finance Minister Alex Contreras and U.S. Ambassador to Peru Lisa Kenna. This event was also attended by Environment Minister Albina Ruiz.
The Debt Swap Program —within the framework of the TFCCA— allows low- and middle-income countries to convert part of the concessional debt they owe to the United States into local currency so as to allocate it to finance projects for the conservation of tropical forests and the environment.
Thus, the foreign debt swap operation will allow the resources that were allocated in the Peruvian public budget for the payment of foreign debt obligations to the United States Government to be deposited in a Countervalue Fund aimed at financing projects for the protection of tropical forests in Peruvian territory.
The total amount of the debt to be swapped, which includes what is owed for principal and interest, will be deposited in the Countervalue Fund, in a national financial entity —in accordance with the original maturity schedule.
Therefore, the Peruvian debt pending payment to the United States Government will be reduced as long as deposits are made in the aforementioned Countervalue Fund. — NNN-ANDINA
