On Thursday and Friday this week, a summit is being hosted by French President Emmanuel Macron to lay out a plan for reducing the debt loads of low-income nations while freeing up more money for climate spending.

In order to develop a high-level consensus on how to forward several initiatives that are currently having difficulty in organisations like the G20, IMF-World Bank, and United Nations, the summit draws dozens of leaders to the French capital.

Many of the issues on the agenda, from debt relief to climate finance, are ideas made by a coalition of developing nations led by Barbados Prime Minister Mia Mottley and known as the “Bridgetown Initiative.”

“We are moving to a world – I would call it the Bridgetown system of finance – (that) recognises that we have to massively upscale the public sector and focus that on building resilience and adaptation because it’s hard for that to be funded any other way,” said Avinash Persaud, a special envoy for Mottley on climate finance.

Officials involved in the summit’s organising stated that strong commitments should be made about financing for developing nations even though legally binding resolutions are not anticipated.

The World Bank and International Monetary Fund (IMF) were established by the Bretton Woods Agreement about 80 years ago, and today’s leaders are trying to get additional money from multilateral lenders for the nations that need it the most.

Officials suggested there should be a specific declaration that the $100 billion objective has been reached and money would now be made available for vulnerable nations through the International Monetary Fund.

The concept, which was initially approved at an African financial summit in Paris two years ago, relies on wealthier states to lend unused special drawing rights to the IMF, which will then lend to underdeveloped nations.

Governments are also considering methods to let the World Bank to employ leverage so that it can extend additional loans to developing nations without jeopardising its top AAA credit rating.

“We want to go farther and should be able to set targets to put more public money on the table,” a French presidency source said.

A growing number of low-income nations are now dependent on IMF funding as a result of rising global interest rates, and the most distressed nations—Ethiopia, Ghana, Sri Lanka, and Zambia—have no choice but to declare default.

Western officials accuse China of being sluggish to move on a G20 “common framework” for debt restructuring because it is now a big creditor after years of massive lending.

In what is widely regarded as a test case for the heavily condemned G20 restructuring framework, a source close to the Paris Club creditor nations said on Monday that the governments of Zambia, which owe money, want to present a debt restructuring proposal in time for the meeting.

In addition to dealing with rising interest rates, developing and emerging market nations are having difficulty coming up with the $1 trillion in funding that economists estimate they will need by 2030 to finance carbon emission reductions, improve climate resilience, and cope with the effects of climate change.

According to Persaud, support is also anticipated for the IMF and other multilateral development banks to pledge $100 billion in currency risk insurance to encourage private investment in climate change and development projects in underdeveloped nations.

Prior to a meeting of the International Maritime Organisation next month, some leaders are anticipated to give their support to long-stalled proposals for a tax on emissions from the shipping industry, according to officials.

They claimed that calls for catastrophe risk clauses—which let a country to postpone repayments in the event of a calamity—in credit agreements are also anticipated.

(Adapted from BeRecoorder.com)

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