UK Export Finance launches new debt solution to help developing countries with climate shocks

• Announced on Finance Day at COP27, UK Export Finance (UKEF) will become the first export credit agency in the world to offer Climate Resilient Debt Clauses (CRDC) in its direct sovereign lending.
• The clauses will 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.
• This announcement is part of the UK Government’s wider objective to help improve the financial resilience of vulnerable countries in the face of severe climate shocks.

UK Export Finance (UKEF) will become the first export credit agency in the world to introduce Climate Resilient Debt Clauses (CRDCs) into its loan agreements. These will provide 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.

This is part of UKEF’s broader ambition to embed climate change into its decision-making in line with its Climate Change Strategy and net zero 2050 target.

Speaking at COP27 Finance Day, Tim Reid, UK Export Finance’s Director of Business Group will say:

Some countries are now facing tough choices between protecting their citizens as they respond to climate shocks or paying down their debts. 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…