Britain’s £800m international project to help the poorest countries in the world adapt to climate change has come under fire after it emerged that almost all the money offered will have to be repaid with interest.
The UK environmental transformation fund was announced with a full fanfare by the UK Prime Minister in November 2007, and was widely expected to be made in direct grants to countries experiencing extreme droughts, storms and sea level rise associated with climate change.
But the money will be administered by the World Bank mainly in the form of concessionary loans which poor countries will have to pay back to Britain with interest.
“It should be grants and not loans, otherwise developing countries will have to pay twice, once for the emissions that caused the problems and then again to clean up the mess,” said Tom Sharman, a policy adviser with ActionAid in London. “This is not money that is additional to Britain’s aid budget. It seems strange to be cancelling debt and then inviting poor countries to take on new debt.”