The Government of Belize is focusing on debt-for-climate swaps to tackle the dual threat of mounting public debt and climate change impacts in the country, with the support of the Commonwealth Secretariat.
A webinar co-hosted by the Commonwealth Secretariat and the Government of Belize, in partnership with the NDC Partnership and UNFCCC Caribbean Regional Collaboration Centre, was held on 22 June to raise awareness on the issue among different ministries in the Government of Belize, as well as participants from the wider Caribbean region. The event feeds into a wider collaboration between Belize and the Commonwealth Secretariat on the development of a “debt-for-climate/nature swap mechanism” for the country.
Setting the scene in his opening remarks, the Minister of State for Finance, Economic Development, and Investment of Belize, Christopher Coye, explained that sustained climate change impacts in the country have led to annual average losses of around US$123 million or 7 per cent of GDP, from wind-related incidents and floods alone.
The economic fallout from the COVID-19 pandemic has exacerbated the challenge, elevating Belize’s debt-to-GDP ratio towards an unsustainable 130 per cent. Mr Coye stated: “It is now commonly acknowledged that small developing and vulnerable countries like Belize are on the verge of being overwhelmed by the dual economic and climate crises of unsustainable debt and adverse climate change effects”.
This has given rise to the need for innovative financing solutions, such as debt swaps. A debt-for-climate swap allows a country to reduce its public debt by agreeing with creditors to write off or discount their debt, and instead, direct the debt service payments to fund agreed-upon climate change projects.
Deputy Secretary-General of the Commonwealth, Arjun Suddhoo explained: “A multifaceted challenge requires a multifaceted solution. Debt-for-climate and nature swaps can help address the public debt levels while at the same time provide resources to help countries build resilience to climate change.”
The Government of Belize had previously implemented a debt-for-nature swap in 2001, though some gaps in knowledge and capacity are only now being targeted with the new Commonwealth partnership.
Minister of Sustainable Development, Climate Change and Disaster of Belize, Orlando Habet welcomed the webinar to share expertise and learn from fellow Commonwealth small states.
He said: “The Government of Belize and partners are keen on exploring and sharing the most updated knowledge on debt-for-climate/nature swaps to a wider audience. [This] webinar is not an isolated event, but an important point in the journey towards addressing multiple developmental and environmental challenges.
“I do believe it’s going to be a catalyst for Belize and other countries in the region to make informed policy decisions towards innovative climate actions.”
The event included presentations from the Secretary of State of the Seychelles, Patrick Payet, and Policy Officer at Antigua & Barbuda’s Ministry of Health, Wellness and the Environment, Michai Robertson, who shared their countries’ experiences with debt-for-climate swaps and the lessons learned.
Other panellists included Senior Director of the Economic, Youth and Sustainable Development Division of the Commonwealth Secretariat, Ruth Kattumuri; Executive Director for the Programme for Belize, Edilberto Romero; Head of Innovation, Technology and Co-funding Platforms, Green Climate Fund (GCF), Andrey Chicherin; Head of UNFCCC Regional Collaboration Centre for the Caribbean, Vintura Silva; CEO of Aqua Blue Investments, Robert Weary; and Coordinator at the Sub-regional Headquarters of the United Nations Economic Commission for Latin America and the Caribbean (UNECLAC), Sheldon McLean.
The Commonwealth Secretariat’s Head of Climate Change, Unnikrishnan Nair and Adviser and Head of the Debt Management Section, Pamella McLaren, also offered perspectives from a pan-Commonwealth lens.
The webinar is part of a broader cooperation between the Government of Belize and the Commonwealth Secretariat through the Climate Action Enhancement Package (CAEP) which the Secretariat is delivering under its Commonwealth Climate Finance Access Hub (CCFAH) in collaboration with the NDC Partnership.
The CCFAH initiative supports Commonwealth member countries to access international climate finance from international funding agencies such as the Green Climate Fund (GCF), Global Environment Facility (GEF) and Adaptation Fund amongst others for climate readiness and action, by helping countries develop successful funding proposals; building human and institutional capacity; providing expert technical advice; and facilitating knowledge-sharing.