Egypt’s International Cooperation Minister calls for innovative financing to tackle climate change, debt at G24

Shaimaa Raafat
3 Min Read

Egypt’s Minister of International Cooperation, Rania Al-Mashat, urged the World Bank Group to prioritize innovative financing solutions for climate action and debt relief during the G24 Governors and Ministers Meeting. The meeting took place at the World Bank and IMF Spring Meetings alongside IMF Managing Director Kristalina Georgieva and World Bank Group President Ajay Banga.

Al-Mashat commended the World Bank’s “Evolution Roadmap” for improved efficiency, but stressed the need for action. She endorsed the Bank’s goal of allocating 45% of financing to climate projects but cautioned against neglecting core development goals like poverty eradication. She emphasized the importance of supporting project structuring and bankability to ensure these projects are successful.

Moreover, the Egyptian minister called for a financing model that incentivizes addressing all eight global challenges identified by the World Bank, including climate change, fragility, health emergencies, and food security.

However, she underscored the importance of country ownership and a demand-driven approach to achieve a balanced effort. She highlighted the need for adequate funding for initiatives like the Global Solution Accelerator Platform (GSAP) and Livable Planet Fund (LPF) to meet these global development aspirations.

Al-Mashat emphasized the need for significantly larger resources to address the economic challenges faced by developing countries. She called for a strong replenishment of the International Development Association (IDA), the World Bank’s fund for low-income countries, highlighting its role in providing concessional financing to the most vulnerable nations.

The Egyptian minister highlighted the persistent gap between climate action commitments and actual funding. She stressed the need to operationalize the Loss and Damage Fund, a mechanism to address climate impacts in developing countries. While acknowledging the positive discussions on innovative tools like debt-for-climate swaps, she urged for scaling up these initiatives to achieve both climate action and debt reduction goals.

Al-Mashat called for stronger collaboration between Multilateral Development Banks (MDBs) and International Financial Institutions (IFIs) to deliver a harmonized approach that aligns with national development strategies and the Sustainable Development Goals (SDGs). She emphasized the importance of country-led platforms to facilitate collaboration, attract private finance, and share knowledge.

The rapid accumulation of sovereign debt in developing countries between 2013 and 2023 was another key concern raised by Al-Mashat. She highlighted the negative impact of high debt service costs and currency depreciation on domestic development programs. She supported the development of a comprehensive approach with concrete measures to help countries break the cycle of worsening debt and climate crises.

Al-Mashat concluded by reiterating the G24’s call for the elimination or significant reduction of IMF surcharges, a position previously adopted by Egyptian President Abdel Fattah Al-Sisi during the New Global Financing Pact in Paris, in June 2023.

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