{"id":48757,"date":"2023-06-22T17:41:25","date_gmt":"2023-06-22T16:41:25","guid":{"rendered":"https:\/\/www.climatechangenews.com\/?p=48757"},"modified":"2023-06-23T10:24:49","modified_gmt":"2023-06-23T09:24:49","slug":"world-bank-debt-disaster-climate","status":"publish","type":"post","link":"https:\/\/www.climatechangenews.com\/2023\/06\/22\/world-bank-debt-disaster-climate\/","title":{"rendered":"World Bank to suspend debt repayments for disaster-hit countries"},"content":{"rendered":"

The World Bank will start offering a pause in loan repayments to the \u201cmost vulnerable” countries when they are hit by catastrophic events including climate-related disasters.\u00a0<\/strong><\/p>\n

The bank’s new chief Ajay Banga unveiled<\/a> the measure at a global leaders’ summit in Paris as part of a raft of tools to help nations dealing with a crisis. <\/span><\/p>\n

He said this will allow countries to “focus on what matters to their leaders when a crisis hits and stop worrying about the bill that\u2019s going to come”.<\/p>\n

Many countries at the forefront of the climate crisis already have some of the highest levels<\/a> of debt distress, meaning they are unable to meet financial obligations.<\/p>\n

Rich nations<\/strong> pledge $2.5 billion for Senegal\u2019s renewable rollout<\/a><\/p><\/blockquote>\n

Today’s announcement marks an important victory for Barbados prime minister Mia Mottley and her Bridgetown agenda, as her campaign to reform global finance for the climate era is known.<\/p>\n

Step forward<\/h3>\n

Speaking at the gathering she helped convene with French President Emmanuel Macron, Mottley hailed recent progress. “Nine months ago, no one was speaking about natural disaster clauses,” she said. “Now, we have people wanting to recognise the wisdom of it because countries do need to pause debt payments if they\u2019re going to house and feed people who are victims of a climate crisis”.<\/p>\n

In a press release, the World Bank said it would initially trial the clause with its most vulnerable borrowers, hoping to expand it to all clients in the future. It also announced other measures including options for countries to redirect a portion of their funds for emergency response and the provision of new types of insurance.\u00a0<\/span><\/p>\n

About three-quarters<\/a> of developing countries’ debt is to the private sector. About a quarter is to multilateral development banks like the World Bank and less than a fifth is owed to governments, mainly China and the big developed nations.<\/p>\n