Working paper 30 January 2024

Debt4ESG Swap - A renewed and sustainable restructuring approach by SACE

Global business insolvencies increased rapidly in the first half of 2023, although far from historically low levels.
The global macroeconomic outlook remains exposed to several downside risks, especially due to the growing geopolitical tensions, primarily linked to the conflict between Russia and Ukraine but also to the China-Taiwan issue with repercussions on Sino-American relations.

In this context, SACE is promoting – with some new enhancements – the application of an already existing (yet poorly adopted) tool, the “Debt-For-Environment-Swap” (“Debt4ESG”). 

Debt4ESG has been historically defined as an instrument to be used in restructuring processes of sovereign exposure, which involves some facilitations allowed to debtor countries in exchange (i.e. “swap”) of their commitment to perform environmental initiatives.

Bearing in mind SACE’s purpose to “contribute to the well-being and prosperity of the Community”, Debt4ESG has the potential to assume a central role in the restructuring of distressed debts, enabling significant positive externalities for the economy and, ultimately, for the planet itself.

This also considering a disruptive approach aimed at broadening the fi eld of application of the instrument both in terms of debt nature (including sub-sovereign and corporate exposure) and debtors’ obligations, including all kinds of initiatives (not only environmental, but also social and governance-related) which could have a positive impact on the Community.

In this regard, we’ve introduced a new type of Debt4ESG: the “Debt-For-ESG-Swap”. The actual application of Debt4ESG should always be considered with a “case by case” approach, also taking into account potential threats related to i) the monitoring of the actual performance of the initiatives and ii) the implications of a possible breach by the debtor.

However, in the first year of application of the new Debt4ESG, we can mention one case among the others, the restructuring process of U.C. Sampdoria S.p.A., which represented a win-win solution both for SACE and the debtor, allowing the going-concern of the company, the maximization of the recovery for SACE and, at the same time, the commitment of Sampdoria to perform specific social initiatives able to produce positive externalities for the ecosystem and for the territory in which the company operates (Genova). A preliminary estimate of the externalities directly linked to these social initiatives has been approx.quantified in €3.2mln over 10 years (the repayment period of the SACE loan).

In 2024 we have set ever more ambitious goals in line with the strategic plan “Together2025” and, more in general, with the role of SACE in the world economy since its establishment. In this context, we expect to expand the application of Debt4ESG, potentially representing a significant breakthrough in restructuring processes.


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Working paper 30 January 2024
Global business insolvencies increased rapidly in the first half of 2023, although far from historically low levels.
Miscellaneous 07 October 2019
Interview with Alessandro Terzulli, Chief Economist at SACE.