Dr.Mohieldin: Debt Reduction, Concessional Financing Are Key to Help Developing Countries Finance Climate and Development Action

Dr. Mahmoud Mohieldin, UN Climate Change High Level Champion for Egypt and UN Special Envoy on Financing 2030 Sustainable Development Agenda, stated that helping developing countries finance their climate and development action requires focusing on debt reduction mechanisms, activating concessional financing, and taking contingency financing into account.

This came during his participation in the First Workshop under the Sharm El Sheikh Dialogue on Article 2, paragraph 1(c) of the Paris Agreement and its complementarity with Article 9 that took place in Bangkok within the meetings of the SCF 2023 Forum, with the participation of Ambassador Mohamed Nasr, Director of the Department of Climate Change, Environment and Sustainable Development at the Ministry of Foreign Affairs, Daniele Violetti, Senior Director of UNFCCC Programmes Coordination, Tosi Mpanu Mpanu, Facilitator of Sharm El Sheikh Dialogue, and a number of SCF and UNESCAP representatives.

Mohieldin said that the bulk of climate and development financing in developing countries is borne by public budgets with a way smaller contributions from the private sector, explaining that most of climate finance in these countries is made through debt, which hinders the plans of developing countries and emerging economies to finance their development and climate plans.

He stressed the need for developed countries to fulfill their commitments in regard to financing climate action in developing countries, foremost of which is the annual $100 billion which was pledged at the Copenhagen conference in 2009 and has not been fulfilled so far, explaining that while this amount does not currently represent more than 10% of the funding required annually for climate action in developing countries, its fulfillment enhances trust between countries and paves the way for further commitments to be fulfilled.

Mohieldin confirmed the importance of mobilizing finance from its public, private, local and external sources, and pointed out the need to share technological solutions and change policies and attitudes to ensure that climate action is actually implemented.

In this context, Mohieldin highlighted the need to strengthen the role of MDBs in financing climate and development action by increasing their capital and adopting more effective policies for low interest long-term concessional financing, while expanding the scope of beneficiary countries to include middle income countries as well as low income countries.

The climate champion stressed the importance of activating debt reduction mechanisms including debt swaps for investment in nature and climate, as well as developing new contingency financing policies to help countries cope with losses and damage caused by climate change.

“It is of the same importance also to find mechanisms to measure financing flows from developed countries to developing ones as well as accountability mechanisms.” Mohieldin said, explaining that the first Global Stocktake, the results of which will be announced during the COP28 in Dubai at the end of the year, will put all parties before their responsibilities towards climate issues.