Debt into investments conversion mechanisms
Debt into investments conversion mechanisms
- Organization: Secretary of State for Trade and Tourism (International Financing Department of the Spanish Ministry of Economy)
- Beneficiaries:
Spanish companies investing in countries in conversion
- Type of assistance:
Debt conversion programmes in private investments available to Spanish companies mean the transformation of the debtor country's payment obligation into private investments. These are implemented by selling debt at a lower price than its nominal value (which involves condoning a portion of the debt) to an investor who will need local currency for its investments in the country of destination. This investor sells the debt acquired from the creditor State to the authorities in the debtor country at a slightly higher price than the amount paid in local currency. These funds are used to finance the local expenses in the country of investment. Programmes such as this exist in Morocco, Bulgaria and Jordan.
Debt conversion programmes also exist in public investments available to Spanish companies and NGOs by means of concessions. These are currently available with Nicaragua, Honduras, the Dominican Republic, Peru, Costa Rica, Bolivia and Jordan.