Barbados' New Debt-for-Social Swap to Boost Education, Healthcare, Heritage

• Barbados is developing a new debt-for-social swap designed to channel savings from restructured sovereign debt into key social programmes, including education, healthcare and heritage, economic affairs minister Kay McConney announced on Tuesday, November 18, 2025.
• McConney made the revelation at the United Nations BCCI Private Sector Forum. The minister for investment stressed that ambition requires financing and that traditional models are proving insufficient. The debt-for-social swap will be used to bolster education, healthcare and heritage, and build community resilience, while still maintaining fiscal responsibility, she added.
• She explained the concept in simpler terms: “What happens is you have debt, there’s a price for that, it’s your interest. What you do is restructure that debt, and whatever savings you make from a reduced interest rate, those savings are committed to the specific purpose you’ve determined, be it climate, be it nature, be it social.”
• McConney positioned the proposed social swap as the next logical step in a broader strategy of innovative financing that Barbados has been pioneering on the global stage.
• The minister also referred to the 2024 debt-for-climate swap. Barbados completed a debt-for-climate swap by repurposing $300 Mn in domestic debt through a syndicated loan from the domestic banking sector, generating an estimated $125 Mn in fiscal savings. These savings were set to be utilised for climate-resilient water, infrastructure and agricultural projects. She insisted that the debt-for-social swap, like the previous nature- and climate-focused deals, will not increase the island’s overall debt burden but will instead use existing obligations more strategically, creating fiscal space for high-priority social initiatives.

(Source: Barbados Today)