According to a report, wealthy countries sent climate funding to the developing world in recent years with interest rates or strings attached that benefited the lending nations.
Offering climate loans at market rates or conditioning funding on hiring certain companies means money for developing countries gets sent back to wealthy ones./ Photo: Reuters
Wealthy nations have loaned at least $18 billion at market-rate interest, including $10.2 billion in loans made by Japan, $3.6 billion by France, $1.9 billion by Germany and $1.5 billion by the United States, according to the review by Reuters and Big Local News, a journalism programme at Stanford University.
Reuters identified at least $10.6B in grants from 24 countries and the European Union that similarly required recipients to hire companies, nonprofits or public agencies from specific nations – usually the donor – to do the work or provide materials. Analysts said grants that require recipients to hire wealthy countries’ suppliers are less harmful than loans with such conditions because they do not require repayment. Sometimes, they said, the arrangements are even necessary – when recipient countries lack the expertise to provide a service.
Many of the conditional loans and grants Reuters reviewed were counted toward developed nations’ pledge to send $100 billion a year by 2020 to poorer countries disproportionately harmed by climate change. Countries of “the global south are experiencing a new wave of debt caused by climate finance,” said Andres Mogro, Ecuador’s former national director for adaptation to climate change.
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