UK credit export agency launches debt help for climate shocks

15th November 2022


Plans to suspend debt repayments from low-income countries and small island developing states while they recover from climate shocks have been unveiled by the UK’s credit export agency.


UK Export Finance (UKEF) is set to become the first export credit agency in the world to offer Climate Resilient Debt Clauses (CRDC) in its direct sovereign lending. The clauses aim to offer low-income countries and small island developing states the ability to defer debt repayments in the event of a severe climate shock or natural disaster. It is also part of UKEF’s broader ambition to embed climate change into its decision-making, in line with its Climate Change Strategy 2021-24.

“Some countries are now facing tough choices between protecting their citizens as they respond to climate shocks or paying down their debts,” said business group director Tim Reid. “UKEF can play an important role in helping governments navigate these decisions. By suspending the debt service payments, UKEF will enable borrowing countries to focus on responding to and recovering from a crisis.

UKEF says it will “encourage other official creditors to consider including similar provisions in their own lending to countries most vulnerable to climate change”.

Meanwhile, the Treasury has unveiled plans to launch a “model term sheet” to embed climate resilient debt deferral into standard bond and loan contracts. As part of the move, multilateral development banks will also agree to form an informal working group to explore CRDCs and other approaches.

The credit export agency has provided more than £7bn of support for green and sustainable schemes since 2019, and has a £2bn direct lending facility dedicated to financing clean growth projects overseas.

Image credit | Shutterstock

Subscribe

Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.


Transform articles

IEMA reviews political party manifestos

Ahead of the UK general election next month, IEMA has analysed the Labour, Conservative, Liberal Democrat, and Green Party manifestos in relation to the sustainability agenda.

19th June 2024

Read more

Nine in 10 UK adults do not fully trust brands to accurately portray their climate commitments or follow the science all the time, a new survey has uncovered.

19th June 2024

Read more

Just one in 20 workers aged 27 and under have the skills needed to help drive the net-zero transition, compared with one in eight of the workforce as a whole, new LinkedIn data suggests.

18th June 2024

Read more

Consumers are flexing their purchasing power in support of more sustainable products and services. Dr Andrew Coburn, CEO of sustainability intelligence and analytics firm, Risilience, considers the risk of greenwashing and sets out three key steps businesses can take to avoid the pitfalls and meet the opportunities of changing consumer demand.

18th June 2024

Read more

With a Taskforce on Inequality and Social-related Financial Disclosures in the pipeline, Beth Knight talks to Chris Seekings about increased recognition of social sustainability

6th June 2024

Read more

Disinformation about the impossibility of averting the climate crisis is part of an alarming turn in denialist tactics, writes David Burrows

6th June 2024

Read more

While biodiversity net gain is now making inroads, marine net gain is still in its infancy. Ed Walker explores the balance between enabling development and safeguarding our marine environment

6th June 2024

Read more

David Symons, FIEMA, director of sustainability at WSP, and IEMA’s Lesley Wilson, tell Chris Seekings why a growing number of organisations are turning to nature-based solutions to meet their climate goals

6th June 2024

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert

IEMA Cookie Notice

Clicking the ‘Accept all’ button means you are accepting analytics and third-party cookies. Our website uses necessary cookies which are required in order to make our website work. In addition to these, we use analytics and third-party cookies to optimise site functionality and give you the best possible experience. To control which cookies are set, click ‘Settings’. To learn more about cookies, how we use them on our website and how to change your cookie settings please view our cookie policy.

Manage cookie settings

Our use of cookies

You can learn more detailed information in our cookie policy.

Some cookies are essential, but non-essential cookies help us to improve the experience on our site by providing insights into how the site is being used. To maintain privacy management, this relies on cookie identifiers. Resetting or deleting your browser cookies will reset these preferences.

Essential cookies

These are cookies that are required for the operation of our website. They include, for example, cookies that enable you to log into secure areas of our website.

Analytics cookies

These cookies allow us to recognise and count the number of visitors to our website and to see how visitors move around our website when they are using it. This helps us to improve the way our website works.

Advertising cookies

These cookies allow us to tailor advertising to you based on your interests. If you do not accept these cookies, you will still see adverts, but these will be more generic.

Save and close