Debt-for-climate, nature swap initiatives agreed upon at SIDS4

…amid calls from Guyana for climate financing initiatives

Among developments coming out of the 4th international conference on Small Island Developing States (SIDS4), recently concluded in Antigua and Barbuda, are agreements to implement debt-for-climate and debt-for-nature swap initiatives.
These agreements came amid calls from Guyana for increased climate financing efforts. During the closing press conference of SIDS4, Tumasie Blair, Deputy Permanent Representative of Antigua & Barbuda to the United Nations (UN), revealed some of the outcomes from the conference. He explained that the need for such initiatives tailored for SIDS, a group Guyana counts itself among, was agreed on during the event.
“The need for tailored solutions to allow SIDS to reach their obligations while pursuing climate action and sustainable development is also essential. A number of debt-for-climate and debt-for -nature swap initiatives have already been completed and are underway in SIDS, creating much-needed fiscal space,” Blair said.
“Several MDBs (multilateral development bank) and bilateral lenders have already incorporated climate resilient debt clauses into loan contracts, to provide relief for SIDS when hit by shocks,” Blair explained.
Further, he noted that during a high-level meeting among delegates from various SIDS, it was agreed that the Muti-dimensional Vulnerability Index (MVI) could help these countries to access concessional financing.

“Despite their significant vulnerabilities, many SIDS do not have access to concessional financing. High- level meeting participants highlighted that the multi-dimensional vulnerability index offers great promise to change this by integrating vulnerability into eligibility criteria,” Blair explained.
In February, Guyana presided over a United Nations Security Council (UNSC) debate on the impact of climate change and food insecurity on the maintenance of international peace and security. President Dr Irfaan Ali, who had chaired the proceedings, delivered a statement in which he called for a targeted approach to tackling climate finance, food insecurity, and for the world to be bold in confronting these threats.
“We believe strongly that a very targeted approach must be adopted. The Security Council must take into account the consequential effects on food security and climate in addressing the issues of conflict and war. And these issues are intricately linked to the rule of law, democracy, and governance,” he said.
“We must adopt measures in our procedures to deal with the effects on food and climate. At a minimum, we must be bold enough. We have the ability, we have the political will, we must now incorporate measures at the UN Security Council to deal with climate and food as it relates to war and conflict,” President Ali had said.
Guyana’s stance for more to be done on the climate change mitigation and food security front had found strong support among other UN high officials. According to the United Nations Framework Convention on Climate Change Executive Secretary, Simon Stiell, there is indeed a need for more climate financing. Stiell, who hails from Grenada, a Small Island Developing State, reminded the council of commitments made during COP28 in Dubai.
It was a view also supported by Deputy Director General of the Food and Agriculture Organization (FAO), Beth Bechdol, who endorsed President Ali’s call for more action. According to her, there is clear evidence that climate change increases the risks of conflict and instability. In turn, conflict contributes to climate change vulnerability.
Guyana has already been trading its carbon, and in fact, by February 2024, had earned US$37.5 million for the sale of high-quality carbon credits for the year from the multi-year agreement with United States energy-major Hess Corporation, which carries a total value of US$750 million.
Last year, Guyana received US$150 million from this deal, where 33.7 million credits are being sold to Hess Corp, amounting to 30 per cent of the carbon sink contained in Guyana’s vast forest cover. Hess Corporation, which is one of the partners operating in the Stabroek Block offshore Guyana, had agreed to buy 2.5 million credits per year for the period 2016 to 2032, valued at US$750 million.
The deal with HESS came on the heels of Guyana being the first country to receive a certification of more than 33 million carbon credits by the Architecture for REDD+ Transactions (ART) on December 1, 2022. (G3)