Climate funding must not overlook poverty eradication and shared prosperity goals: Al-Mashat

CAIRO - 17 April 2024: Minister of International Cooperation and Governor to the World Bank Group, Rania Al-Mashat, commended the commitment to allocating 45 percent of annual financing to climate-related projects. Still, she emphasized that it should not come at the expense of addressing core developmental challenges such as poverty eradication and shared prosperity. Al-Mashat called for a focus on supporting project structuring and bankability and addressed the G24 Governors and Ministers Meeting during the World Bank and IMF 2024 Spring Meetings in Washington.

 

In her speech, the minister called for increased financial capacity for the International Development Association (IDA) to confront economic challenges in developing countries. She highlighted the sizable gap between commitments and financing for climate action, urging the operationalization of the Loss and Damage Fund and scaling up innovative financing tools like debt-for-climate swaps.

 

“We support the call for a strong replenishment of the IDA21 and this robust replenishment will require strong efforts from contributing countries to safeguard concessional financing for the most vulnerable countries. This should be center stage in 2024,” Al-Mashat stated in her speech.

 

She highlighted the need for a Framework of Financial Incentives (FFI) that encourages countries to address the eight global challenges endorsed by Governors in Marrakech. These challenges include climate change adaptation, fragile states, epidemic prevention, energy access, food security, water security, digitalization, and biodiversity protection.

 

Al-Mashat emphasized the importance of strengthening country ownership and demand-driven engagement to address all eight challenges balanced, including mobilizing private capital. Adequate funding for the Global Solution Accelerator Platform (GSAP) and Livable Planet Fund (LPF) was also stressed.

 

She also encouraged stronger collaboration between multilateral development banks (MDBs) and international financial institutions (IFIs) to align global SDG implementation with national strategies. She emphasized the importance of country platforms to facilitate resource allocation, unlock private finance, and foster knowledge sharing.

 

The Minister of International Cooperation mentioned that sovereign debt accumulated rapidly between 2013 and 2023 in developing countries, and high debt service costs coupled with currency depreciation are eroding the capacity of countries to finance domestic development programs. In this regard, the Minister supported the call for designing a comprehensive and responsible approach with concrete and impactful measures to support countries to break the vicious cycle of worsening debt and climate crises.