Yasmine Fouad, Egypt’s Environment Minister, spoke on behalf of President Abdel Fattah El-Sisi at the high-level global climate inventory event on the sidelines of COP28 in the United Arab Emirates, emphasizing the debt burden of developing countries.
Speaking on behalf of President El-Sisi, Fouad underlined the significance of utilizing the current conversations to assess and galvanize global action to improve support for the implementation of climate action, especially in light of the conclusions of the COP27 in Sharm El-Sheikh, Egypt.
She pointed out that COP27 was the first COP to concentrate on the flaws in the multilateral financing framework and to pinpoint three main areas for enhancing the system: increasing the amount of financing mobilized, making it easier for developing nations to access financing, and giving concessional financing instruments priority while taking new challenges into account.
Fouad highlighted the substantial obstacle presented by the $160 billion annual funding requirement for adaptation support in developing nations, while actual adaptation financing flows only total $22 billion. Furthermore, current flows do not surpass $100 billion annually, whereas the estimated $6 trillion in funding required to carry out developing countries’ pledges by 2030.
Over $1 trillion in funding is needed yearly for the energy transition, and $4 trillion is needed to reach carbon neutrality. According to expert reports, the $2.5 trillion climate financing gap is made worse by the external factors that have caused developing countries to face a debt crisis. The inability of developing nations to obtain loans at reasonable interest rates is exacerbated by the debt crisis.
Additionally, Fouad relayed El-Sisi’s request that nations enact a series of policies to mitigate the trillion-dollar annual costs to the world economy incurred by successive climate crises. One of these strategies is to increase the number of debt-for-development swaps, which will expedite the activation of debt management mechanisms for developing nations, including middle-income nations.
El-Sisi also called on nations to sign up for the Sustainable Debt Alliance Initiative, which Egypt and the UN Economic Commission for Africa started.