Debt costs overshadow climate finance in small island states-report - BusinessWorld Online

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Small developing island states heavily exposed to the effects of climate change and often in critical debt situations spend at least 18 times more on debt servicing than they receive in climate finance, a report showed.

A group of 37 island states, home to some 65 million people, “urgently need to increase their fiscal space to tackle the multiple challenges and crises facing them,” wrote Iolanda Fresnillo, one of the authors of the European Network on Debt and Development report.

Over the same period, 22 of the nations paid more than $26.6 billion to their external creditors, which comprises 50 non-governmental organisation, it said. This in turn meant governments needed to spend more revenue on debt servicing, with countries like Belize, Cape Verde, Dominican Republic, Jamaica, Maldives, Grenada and Papua New Guinea allocating between 15%-40% to pay their external creditors, it said.

In June, the fund’s executive board approved a $60 million programme for Cape Verde while Barbados struck a deal for $293 million in late September.

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