SOCAR сhief backs debt-for-climate swaps to engage developing countries

Debt-for-climate swap mechanisms could serve as an effective way to involve developing countries more actively in the global climate agenda, SOCAR President Rovshan Najaf said on January 22.

Speaking at a panel discussion at the World Economic Forum 2026, Najaf said one of the potential instruments is the exchange of sovereign debt obligations for the implementation of climate and decarbonization projects. 

According to Najaf, the central issue in discussions on climate policy in developing countries remains motivation.

“If we look at this on a broader scale, when it comes to developing countries, the first question we are constantly asked is: ‘Why do we need this?’” he said. “These countries say: ‘You already have developed infrastructure, you are at a different stage of development, and therefore you look at the situation differently.’”

He stressed that for many states, ensuring basic access to essential infrastructure is still the overriding priority.

“They ask a reasonable question: why should we move at the same pace with you on climate change and decarbonization if our urgent needs have not yet been met?” Najaf said. “This question requires an honest and clear answer, because without the consent of these countries, without creating a sense of involvement and readiness to participate, climate projects will not be able to achieve their goals.”

Najaf identified financing as the second major challenge, particularly for countries facing high and often “toxic” levels of debt.

“After the question ‘Why do we need this?’ the next one immediately arises: ‘How are we going to finance it?’” he said. “The private and public sectors in developing countries are not able to bear all the costs. Their main reliance is on external support in the form of grants and loans from international organisations and development funds. But the problem is that these countries already have an extremely high debt burden. How should one act in such a situation?”

As a possible response, Najaf proposed the use of debt-to-climate swap mechanisms.

“This means that debt servicing obligations would be automatically redirected toward financing ‘green’ or decarbonization projects through accelerated and simplified mechanisms,” he said. “The use of such rapid-response instruments could become a practical way out of the current situation.”

By Tamilla Hasanova