Guidance

Climate Resilient Debt Clauses

Legal template for the Climate Resilient Debt Clauses developed by UK Export Finance.

From:
UK Export Finance
Published
22 June 2023

Documents

Climate Resilient Debt Clauses

PDF, 221 KB, 9 pages

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Details

The frequency and intensity of environmental crises and natural disasters are increasing as a result of climate change. In the wake of a severe crisis, debt service repayments can crowd out vital spending needed for disaster response and recovery. Climate Resilient Debt Clauses (CRDCs) can help borrowing countries respond to this challenge by suspending debt repayments on a cost-neutral basis—providing borrowing countries with additional space to respond to a crisis while lowering risks of default.

As announced at COP27, UK Export Finance has developed the first Climate Resilient Debt Clause to be offered by any export credit agency. UKEF has made this available since 1 April in its direct sovereign loans (including the direct lending portion of any hybrid guarantee and lending arrangements) to low-income countries (LICs) and Small Island Developing States (SIDS).

We are publishing our CRDC template in line with the UK Government’s firm commitment to debt sustainability & transparency. The clause is available to all eligible borrowing countries for inclusion in UKEF direct lending arrangements and can be tailored to fit transaction- and market-specific requirements if required.

Published 22 June 2023