Source · Select Committees · International Development Committee
Recommendation 7
7
Not Addressed
Paragraph: 33
UK climate finance labelled as grants are disbursed as loans
Conclusion
We are concerned that the UK labels the climate finance it provides via multilateral development banks as “grants”, but that these are disbursed in the form of loans to recipient countries.
Government Response Summary
The government's response details the scale of climate finance needed and the importance of mobilising private capital, but does not address the committee's concern regarding whether climate finance reported as grants is disbursed as loans through multilateral development banks.
Paragraph Reference:
33
Government Response
Not Addressed
HM Government
Not Addressed
Partly Agree 13. The scale of investment required by emerging markets and developing economies (EMDEs) to deliver a just climate transition is enormous. By 2030 EMDEs excluding China will require $2.4 trillion a year for climate alone. Driving more private capital for climate and development is an important component of wider efforts to reform the international financial system and is a key priority for our low- and middle-income country partners, featuring prominently in the Bridgetown Initiative, UN SDG Stimulus, the Nairobi declaration and the Paris Agenda for People and the Planet. 14. The UK uses ODA, often in the form of grants, to develop support specialist agencies to develop and deliver financing innovations which can mobilise significant investment into more challenging sectors and geographies and be scaled by markets. The UK is committed to meeting the UK pledge to spend £11.6 billion in International Climate Finance between 2021/22 and 2025/26. The UK ICF portfolio crowds in private finance, with £7.8 billion private finance mobilised to EMDEs to date. 15. Developing countries require significant investment to drive up their economic development, meet the SDGs and stay on a path to a net zero society by 2050. Global ODA will play an important role, but it is essential that the international community also catalyse responsible investment that mobilises private finance and meets high quality standards, leads to improved economic and social outcomes and avoids creating more debt among developing countries.