Creditors should consider forgiving poor countries’ debts in return for a commitment to using outstanding payments on programs to mitigate climate change, Nigerian Vice President Yemi Osinbajo said.

In addition to freeing up government budgets, such a plan would enable creditors and debtor nations to allocate the spending to their so-called National Determined Contributions, Osinbajo said in a speech at the Center for Global Development in Washington DC on Thursday. The NDCs, agreed in Paris in 2015, represent commitments by countries to reduce greenhouse-gas emissions and adapt to climate change.

“I think this might also be a point to consider especially when we look at the escalating debt situations of many developing countries, especially in the aftermath of the pandemic, and the Russian-Ukrainian crisis,” Osinbajo said.

A growing number of developing nations are facing debt distress as the economic effects of Russia’s war with Ukraine compound the impact of the coronavirus pandemic. At least 20 emerging market sovereigns’ dollar bonds are trading in distressed territory, according to data compiled by Bloomberg. Some of those may join Sri Lanka and Belarus, which defaulted this year.

Osinbajo also said that Africa will need a fourfold increase in investment to achieve the energy mix needed to limit global warming to 1.5 degrees Celsius. 

The continent needs $40 billion a year -- quadruple the amount that’s been invested since 2018 -- to provide its citizens with access to clean energy sources, Osinbajo said. 

He called for a reversal of the trend in which 15% of the world’s population in high-income countries receives 40% of global energy investments, and developing countries with 40% of the world’s population receive only 15%.

“If energy access issues are left unaddressed, we’ll continue to see growing energy demand being addressed with high-polluting and deforesting fuels such as diesel, kerosene and firewood,” Osinbajo said.

Bloomberg