The Sustainable Debt Coalition (SDC) is a collaboration of debtors and creditors, advocating for comprehensive reform of the global sovereign debt architecture to support developing countries to achieve their climate change goals and the Sustainable Development Goals (SDGs). It also includes within in it, a subgroup of borrower-only members acting together in a “borrower club”.
The SDC recognises that excessive debt loads constrain development. Members are committed to freeing fiscal space for developing countries by prioritising innovative and established measures that simultaneously reduce long-term sustainability risks. Recent progress on many such measures will be highlighted during this event.
The SDC was announced at the Finance Day of COP27 in November 2022. Since its announcement, over 20 nations have expressed interest in joining the Coalition. In March 2023, the goals of the Coalition were endorsed by the 55th Conference of Ministers of the Economic Commission for Africa in Addis Ababa. The Coalition has met informally throughout 2023, including on the margins of the meetings of the IMF and World Bank and the Summit on a New Global Financing Pact in Paris. The priorities of the Coalition focus on transformational measures with potential for global support, including accelerated credit enhancement, use of bonds with debtor-defined key performance indicators (KPIs) including sustainability-linked bonds, climate-resilient debt clauses, adoption of the sustainable budgeting approach, and facilitation of debt-for-climate swaps.
This official launch meeting will convene governments, partners to the Coalition, international financial institutions, and other parties to announce the communique of the Coalition, review progress to date, and develop forward priorities for a shared framework for sustainable debt. The groundbreaking work of partners will be elevated, with a particular focus on immediate opportunities for credit enhancement and KPI-linked bonds, as demonstrated by the new Roadmap to Accelerate Sustainability-linked Sovereign Financing of Nature and Climate. This event will gather momentum for the partners’ Coalition Summit to be held in Cairo, Egypt in early 2024.