§262p–4i Multilateral Development Banks and Debt-for-nature Exchanges

Summary

The Secretary of the Treasury must tell the United States Executive Directors at multilateral development banks to push each bank to create a department focused on environmental protection and conservation (unless the bank already has one). That department must set and watch strict environmental rules for loans, promote debt-for-nature exchanges, and help protect tropical forests, renewable resources, endangered ecosystems, and species. The U.S. Directors must also support loans that help borrower countries put strong environmental policies into practice; encourage using part of certain environmental loans to help countries buy back private debt at market discounts or by negotiation; ensure bank staff help countries work with local and international nonprofits or private groups on debt-for-nature deals; and press the banks to adopt rules that include sustainable-use policies in loan agreements, support economic programs for good environmental practice, and require that country policy changes or extra funds go to at least one of nine areas (oceans/atmosphere, species protection, parks and reserves, natural resource management, local conservation, training for conservation institutions and people, conservation knowledge and public engagement, land and ecosystem management, or regenerative farming/forestry and watershed work). The U.S. Executive Directors must try to negotiate with other directors to agree on clear guidelines for what “restoration, protection, or sustainable use” means. Until they finish those talks, they must treat such policies as having five features: they keep and restore renewable resources without harming critical ecosystems or worsening global environmental problems; they conserve and manage resources so pressure on nature is reduced and land use is sustainable; they do not exceed local limits like water cycles, soil, climate, vegetation, and cultural practices; they promote restoring soils, plants, water cycles, wildlife, key ecosystems (such as tropical forests, wetlands, and coastal areas) and biodiversity; and they, when possible, prevent pollution that threatens health or important ecosystems and favor energy use that relies on renewables. The U.S. Directors must try to include these five features in the final bank guidelines.