At a deeply troubling Spring Meetings for climate advocates – where the World Bank and IMF both self-censored, avoiding any discussion of climate change in official events in an attempt to mitigate blowback from a US administration that has withdrawn from the Paris Agreement and is waging an attack on climate action at home and abroad (see Dispatch Springs 2025) – the Vulnerable 20 Group’s ministerial meeting on 24 April was one of the few venues where the accelerating climate crisis was discussed in earnest.
The V20’s communiqué was pointed, offering a stinging rebuttal to the claim by US Treasury Secretary Scott Bessent a day earlier that climate change is not ‘core’ to macro-stability considerations: “As the world risks crossing critical geophysical climate thresholds including the 1.5°C temperature limit, official development assistance (ODA) and fiscal space are shrinking, forcing cuts in essential services, such as health, education, and critical infrastructure, even as climate-vulnerable economies have already lost 20% of potential GDP growth over the past two decades due to climate change. Attaining the sustainable development goals (SDGs) is now at risk.”
Barbados finance minister Ryan Straughn, who chaired the ministerial, noted in his opening remarks, “Rising capital costs—three times higher than in G7 countries—youth unemployment soaring to 20%, and mounting security threats: this is the cost of global climate inaction for the most vulnerable. As disasters strike harder and faster, V20 countries need $490 billion a year by 2030—five times more than the $90 billion currently flowing—to fund climate action, development, and nature.”
As disasters strike harder and faster, V20 countries need $ 490 billion a year by 2030—five times more than the $ 90 billion currently flowingRyan Straughn, Barbados finance minister
In this context, the V20 communiqué once again highlighted its lack of official observer status at the Bretton Woods Institutions as symptomatic of their broader lack of voice in the Bretton Woods Institutions: “Despite representing 22.4% of the world’s population, V20 countries hold only 5% of International Monetary Fund (IMF) quotas and 6.8% of its voting power, and 8.6% across the Multilateral Development Bank (MDB) system. Recognizing the V20 as an official intergovernmental group within the Bretton Woods system—and increasing the shareholding in the international institutions…—is essential in recalibrating global governance and accessing the capital and policy support needed.”
The V20 calls for an IMF that’s fit for purpose
The V20 was vocal that the Fund in particular must do more to calibrate its policy to be tailored to the urgent challenges facing climate-vulnerable economies, including through its upcoming Comprehensive Surveillance and Conditionality Reviews. The communiqué noted, “IMF programs should enable and support the scaling up of [climate-related] investments. The review of conditionalities is an important opportunity for the IMF to align its program design with the goals of the Paris Agreement and enable the achievement of national climate change commitments….Moreover, the IMF lending toolkit should advise against cutting spending on climate resilience, which leaves countries unprepared for intensifying climate impacts.”
The V20 also called for changes to the eligibility criteria for the Resilience and Sustainability Trust, ahead of a review of the new instrument, which was created in 2021, in 2026: “We reiterate the need to remove the requirement for a concurrent restructuring program to access the RSF. Climate proofing our economies is a long-term challenge and access requirements should enable and facilitate investment in mitigating prospective shocks.” The V20’s asks come as the IMF’s Independent Evaluation Office undertakes an evaluation of the IMF’s climate work, since the launch of its climate strategy in 2021 (see Observer Autumn 2021), with the report expected to be presented to the IMF’s board by May 2026.
V20’s climate debt comes due, illustrating climate injustice
Despite bearing relatively little responsibility for the greenhouse gas emissions that have caused the climate crisis, V20 members continue to bear the brunt of its impacts, including through mounting debt levels. The communiqué noted that, “The latest World Bank International Debt Statistics reports that external debt servicing costs for V20 members surged to US$120 billion in 2024, which more than doubles the 2018 level. Eleven of our members spent more than 25% of their revenue on debt payments,” with 19 V20 members judged by the Bank and Fund to either be in or at risk of debt distress.
The communiqué called for a step-change to debt relief efforts for V20 members, after years of rhetoric emanating from the G20’s ineffective Common Framework for Debt Treatments (see Observer Spring 2025): “To expedite restructuring processes, we call for an automatic, two-year standstill on debt service payments, with no accumulation of arrears, for swift and timely restructuring.…Given the importance of multilateral creditors for the V20, we call for a replenishment of the Debt Relief Trust Fund which can enable participation without posing any risk to the credit ratings of multilateral development banks and the replenishment of the IMF’s Catastrophe Containment and Relief Trust.”
The V20 also called for more comprehensive debt sustainability assessments from the Bank and Fund, which currently ignore, “the transformative benefits of risk-informed resilience investments and natural capital.” The V20 argued, “By fully integrating these investments, natural capital valuation, and shocks from climate risks, we can reveal the true financing mix—ranging from restructuring to credit enhancements—needed for sustainable debt.”
Finally, the V20 called for the Bank and its MDB peers to increase the availability of concessional financing: “MDB loans…remain priced above our medium-term growth rate, making them no different from private capital. We call on MDBs to ensure their loan products are priced below the medium-term GDP growth rate in order to ensure affordability. We call for a genuine rate that is concessional for climate-vulnerable countries, one that is separate from market conditions.”
