Chapter SOCAR: Debt-for-climate project swaps can help developing countries

One of the possible tools for involving developing countries in the climate agenda could be the mechanism of debt-for-climate swaps (debt-to-climate swaps).

As reported by BAKU.WS with reference to Report, this was stated by the president of the State Oil Company of Azerbaijan (SOCAR) Rovshan Najaf, speaking at a panel discussion at the World Economic Forum 2026 (WEF 2026).

According to him, when discussing the climate agenda in developing countries, the key issue remains motivation.

"If we look at the big picture, when it comes to developing countries, the first question that we are constantly asked is: 'Why do we need this?' It is these countries that say: 'You already have a developed infrastructure, you are at a different stage of development and therefore you look at the situation differently'," noted R. Najaf.

He emphasized that for many states, basic access to elementary infrastructure remains the priority.

"They ask a reasonable question: why should we go at the same pace with you on climate change and decarbonization issues if our pressing needs are not yet met? This question needs an honest and clear answer, because without the consent of these countries, without fostering a sense of involvement and willingness to participate, climate projects will not be able to achieve their goals," added the head of SOCAR.

The second key problem, according to him, is financing climate initiatives in countries with high and often "toxic" debt burdens.

"After the question 'Why do we need this?' the next one immediately arises: 'How are we going to finance this?' Private and public sectors in developing countries are not able to bear all the expenses. Their main calculation is for external support in the form of grants and loans from international organizations and development funds. However, the problem is that these countries already have an extremely high debt burden. How to act in such a situation?" he noted.

As one of the possible solutions, R. Najaf suggested using the mechanism of debt-for-climate swaps.

"It's about debt service obligations being automatically directed to finance 'green' projects or decarbonization projects through accelerated and simplified mechanisms. The application of such rapid response tools can be a practical way out of the current situation," he concluded.