By Andrea Shalal
WASHINGTON, Apr 7 (Reuters) – The World Bank and the International Monetary Fund plan to launch a platform to advise poor countries on financing climate change and conservation activities, amid a broader push that could link the said spending on debt relief, according to a draft of the document seen by Reuters.
Advisers would include UN officials, non-governmental organizations, private investors and even rating agencies with experience in securing investments, including grants, low-interest or no-interest loans and conditional debt relief, the document says.
The initiative reflects a growing recognition that the economic turmoil triggered by the COVID-19 pandemic has exacerbated budget constraints and debt challenges that hamper the ability of some countries to transition to clean energy, protect wildlife. or make infrastructure changes to prepare for climate impacts.
“Unlike other initiatives that focus on one project at a time, this one will focus on systematically changing entire economies,” said a source familiar with the initiative, adding that the platform points to a more holistic approach to “the triple crisis of debt, climate change and loss of biodiversity “.
In an interview in February, World Bank President David Malpass raised the possibility of linking debt relief with investments to combat climate change and reduce fossil fuel emissions, but did not elaborate.
The institutions’ discussions toward that goal are detailed in a World Bank document on debt published Monday on the agency’s website for its annual spring meetings.
The document says they are developing an “organizational framework” to connect debt relief with countries’ plans to invest in “green, resilient and inclusive development,” or GRID for its acronym in English.
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“For countries that are close to their debt limits, GRID financing will require sufficient grants and concessional loans that could be increased by conditional debt relief or a new profile,” the joint document said.
The World Bank estimates that more than 30 of the world’s poorest countries are at high risk of over-indebtedness. Three of them, Chad, Ethiopia and Zambia, have requested the restructuring of their debts under a common framework agreed last year by China, the world’s largest bilateral creditor, and other major G-20 economies with the Paris Club of creditors. officers.
Last month, an independent technical group started work on the new Debt / Climate / Nature Platform. It will allow experts from the public and private sectors to provide technical assistance and data to countries on potential investments and help them find public and private financing, according to the document.
A second source said that planning was still in the early stages, but that the goal was to launch the platform by the end of 2021, with an organized secretariat at the World Bank.
(Report by Andrea Shalal in Washington, Edited in Spanish by Manuel Farías)