Egypt’s Minister of Environment, Yasmine Fouad, highlighted the debt burden of developing nations as she delivered Egypt’s speech at the high-level event of the global climate inventory on the sidelines of COP28, in the UAE, on behalf of President Abdel Fattah Al-Sisi.
Fouad, speaking on behalf of President Al-Sisi, emphasized the importance of using the ongoing discussions to evaluate and mobilize international action to enhance support for climate action implementation, particularly in light of the outcomes of COP27 in Sharm El-Sheikh, Egypt.
She noted that COP27 was the first COP to focus on the shortcomings of the multilateral financing framework and to identify three key areas for improving the financing system: mobilizing more financing, facilitating access to financing for developing countries, and prioritizing concessional financing instruments, taking into account emerging challenges.
Fouad underscored the significant challenge posed by the funding requirement for adaptation support in developing countries, which amounts to $160bn annually, while actual adaptation financing flows stand at a mere $22bn annually. Additionally, the funding needed to implement developing countries’ pledges by 2030 is estimated at $6 trillion, while current flows do not exceed $100bn annually.
The financing required for the energy transition exceeds $1trn annually, and $4trn to achieve carbon neutrality. Expert reports estimate the climate financing gap at $2.5trn, exacerbated by the debt crisis facing developing countries due to external factors. This debt crisis further constrains developing countries’ ability to access loans at affordable rates.
Moreover, Fouad conveyed Al-Sisi’s call for countries to adopt a set of measures to address the costs imposed by successive climate crises on the global economy, which amount to trillions of dollars annually. These measures include accelerating the activation of debt management mechanisms for developing countries, including middle-income countries, by expanding debt-for-development swaps.
Al-Sisi also urged countries to join the Sustainable Debt Alliance Initiative, launched by Egypt in collaboration with the United Nations Economic Commission for Africa.