Push for climate funding framework

LONDON:

The world's most climate-vulnerable nations and a set of major development banks launched a new initiative on Tuesday aimed at unlocking cheaper and more predictable fund-ing for countries increasingly facing climate shocks and rising debt costs.

The "Vulnerability to Viability (V2V) Compact", agreed by the Climate Vulnerable Forum (CVF) and its "V20" finance

ministers, brings together 74 economies and more than a dozen multi-lateral lenders from the World Bank to the Vienna-based OPEC Fund.

It seeks to address the financing gaps left by years of global crises, more frequent and ex-treme droughts, hurricanes or floods and what some say is a mispricing of

sovereign risk that pushes up poorer countries' borrowing costs.

The Compact focuses on affordable and concessional finance, mobilising private capital and developing "shock-responsive" financing, such as loans with payment suspension clauses, that help governments maintain essential services during crises.