Developing countries face climate finance deficit as loan payments soar

Résumé détaillé

Repayments on climate loans could overtake new lending by 2036, according to CARE analysis shared exclusively with Climate Home News The post Developing countries face climate…

With rich governments and development banks delivering more climate finance as loans, developing countries could be paying back more each year than they receive in new lending by the mid-2030s, new research has found.

CARE Denmark and the CARE Climate Justice Center worked out the repayment schedules of around 17,500 climate loan records reported by developed countries and multilateral lenders between 2011 and 2024, in what the researchers say is the first analysis of its kind.

It estimates that repayments on these public climate loans, including interest and fees, nearly tripled from $6.9 billion in 2020 to $20.1 billion in 2024. That is equivalent to around a fifth of the public climate finance that developed countries reported providing that year.

With rich governments and development banks delivering more climate finance as loans, developing countries could be paying back more each year than they receive in new lending by the mid-2030s, new research has found.

CARE Denmark and the CARE Climate Justice Center worked out the repayment schedules of around 17,500 climate loan records reported by developed countries and multilateral lenders between 2011 and 2024, in what the researchers say is the first analysis of its kind.

It estimates that repayments on these public climate loans, including interest and fees, nearly tripled from $6.9 billion in 2020 to $20.1 billion in 2024. That is equivalent to around a fifth of the public climate finance that developed countries reported providing that year.

If climate lending stays at its 2024 level each year and on the same terms, annual repayments on old and new loans would overtake fresh lending in 2036, the researchers found.

“By not making the backflows of climate finance visible, Global North countries cheat their public,” John Nordbo, senior climate adviser at CARE Denmark, told Climate Home News. “They give an impression that they are actually more supportive than they are.”

The World Bank is by far the biggest lender in the…

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