Climate Change: Finance
The question
To ask the Secretary of State for Foreign, Commonwealth and Development Affairs, what assessment he has made with Cabinet colleagues on the potential impact of the level of global climate finance that is provided through loans on indebtedness in lower income countries.
Answered by Foreign, Commonwealth and Development Office
The UK only provides climate finance directly to lower income countries' governments in the form of grants.
The UK also supports the Multilateral Development Banks and multilateral climate funds to provide climate finance, including through loans. These institutions have robust frameworks that explicitly take into account both the income and debt levels of countries to ensure financing is sustainable. Poorer countries and those with higher debt levels are prioritised for grants. Loans provided to lower income countries are highly concessional with grace periods and low interest rates making them far cheaper sources of funding than countries would otherwise be able to access.
The UK expects other partners to consider and assess debt sustainability in their provision of climate finance.
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