Developing and emerging market countries are grappling with a triple crisis, encompassing high debt burdens, escalating costs of climate change and related disasters, and critical biodiversity loss.
The intersection of these challenges creates a barrier for these countries to address their nature and climate-related needs effectively.
The world’s largest multilateral development banks and other international financial institutions have agreed to mobilize credit enhancement for sustainable climate & nature-linked sovereign financing at the UN Climate Conference in 2023.
During COP28, a Task Force on Credit Enhancement of Sustainability Linked Sovereign Financing for Nature and Climate was launched to tackle climate, nature and debt challenges. The Credit Enhancement Task Force is jointly co-chaired by the Inter American Development Bank (IDB) and the European Investment Bank (EIB).
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Improve the access and affordability of credit enhancement instruments.
Increase the effectiveness and efficiency of tools like debt-for-nature swaps.
Provide a platform for Multilateral Development Banks to communicate and coordinate actions.
It is hoped that by removing the existing silos between multilateral development banks we can encourage a consistent and harmonised approach to developing impactful credit enhancement solutions.