Question

To ask the President of COP26, what steps he is taking during the UK's COP presidency to address the barriers posed by debt to climate-vulnerable countries’ ability to respond to the climate crisis.

The Presidency has prioritised the issue of debt sustainability in the lead up to and since COP26. The UK has championed the IMF’s $650 billion allocation of Special Drawing Rights (SDRs) to help boost global liquidity and we are supporting the IMF in establishing a Resilience and Sustainability Trust that will provide a long-term financing offer for vulnerable countries facing structural challenges including climate change.

To support low-income countries to tackle their debt vulnerabilities, in November 2020 the UK, alongside our G20 and Paris Club partners, agreed a new Common Framework for Debt Treatment beyond the Debt Service Suspension Initiative. This brings together G20 and Paris Club creditors to coordinate debt treatments following a request from any of the 73 eligible low-income countries. Private sector creditors will be expected to implement debt treatments on at least as favourable terms as those agreed by official creditors. The UK-led G7 Private Sector Working Group is also exploring ​​Climate Resilient Debt Instruments (CRDIs), which will crucially suspend any debt service repayments in the event of a natural disaster in climate vulnerable countries.