Rockefeller Foundation Welcomes Release of Bridgetown 3.0

NEW YORK | September 25, 2024 — On the sidelines of the 79th UN General Assembly, the Honourable Miss Mia Amor Mottley, Prime Minister of Barbados announced the “Bridgetown 3.0,” the next phase of the Bridgetown Initiative to drive financial system reforms necessary for climate action,, during an event at the Council on Foreign Relations. With every dollar invested in adaptation can avoid $6 in costs, generate jobs and diversify economies. The Bridgetown 3.0 list of priorities includes specific actions that can unlock more finance for adaptation, help shock-proof economies from natural disasters and change the rules of a broken financial system. The goal is to not only create a more equitable system, but also help drive long-term economic growth.

Prime Minister Mottley, one of the Bridgetown Initiative’s architects, said: “It might sound like I am a stuck record. That is because not enough has changed”. The renewed set of reform proposals get more specific than before to build a more responsive, fairer and more inclusive global financial system with stronger representation from the Global South in climate finance design and decision-making. And the prize is worth it.” 

Currently, more than half of the world’s population lives in a country which pays more in debt service each year than it does on education, health or adaptation. Meanwhile, the majority of adaptation is financed by debt, which reinforces the vicious link between debt vulnerability and climate vulnerability. With some 70 countries at risk of debt distress, Bridgetown 3.0 speaks to the critical importance of reforming the G20 Common Framework for debt treatment to address borrower needs in a timely way and to prevent countries from defaulting using proactive measures and, in cases of default. 

President of The Rockefeller Foundation, Dr. Rajiv J. Shah said, “Right now, money is flowing in the wrong direction—out of developing countries rather than into efforts to make people healthier, safer, better nourished, and more prosperous. The world needs to change course and once again, Prime Minister Mottley and the Bridgetown Initiative are showing the way. This is a roadmap for how we get resources flowing back where it’s needed most.” 

Bridgetown 3.0 Campaign: 

With an estimated annual finance need of $1.8 trillion annually to address the climate crisis and nature related investments in emerging markets and developing countries and $1.2 trillion annually to achieve the other Sustainable Development (SDGs), the Bridgetown 3.0 campaign lays out recommendations to narrow some of this financing gap. First and foremost, it calls upon international financial institutions to give a stronger voice to developing countries in their governance and decision-making, while: 

• New and existing donor countries secure a robust replenishment of the International Development Association (IDA), the World Bank’s concessional arm for low-income countries, by at least $120 billion during the IDA Final Pledging and Replenishment Meeting #IDA21 (Dec. 5-6 in South Korea) and a tripling of IDA by 2030. 

• Multi-lateral Development Banks (MDBs) fully implement the G20 Capital Adequacy Framework recommendations, which would significantly increase and improve lending while also securing commitments from MDB shareholder countries to initiate new general capital increases for lending to be further scaled. 

• The International Monetary Fund (IMF) reform the way it assesses countries’ abilities to repay loans, especially taking into account the investments made in adaptation and natural capital as potential drivers of long-term growth and enhanced resilience.

• The World Bank establish a dedicated “universal contingent finance facility” to provide emergency liquidity on concessional terms to all climate-vulnerable countries after a natural disaster hits.

• An additional USD 500 billion a year in private finance mobilised for developing countries through: (1) better project preparation to build a pipeline of investable projects; (2) more local currency blended finance mechanisms to unlock pools of domestic capital; and (3) new and more robust partnerships between the private sector and philanthropy to explore innovative insurance mechanisms to pay for the avoided costs that come from investing in adaptation.

Launched in 2022, the Bridgetown Initiative has been instrumental in driving financial system reforms to unlock money for climate action, including spurring the rechannelling $100 billion of Special Drawing Rights to developing countries. The Initiative is also known for getting “debt pause clauses” included into loan agreements so governments can suspend repayments if a natural disaster hits – which often have a devastating impact on the economy as well as the lives and livelihoods of affected countries.

Despite some Caribbean countries losing in excess of 60% of their housing and/or coastal infrastructure in the wake of Category 5 Hurricane Beryl this summer, many were unable to access the concessional finance needed for urgent repair – showing the importance of such debt pause clauses but, more fundamentally, of reforming the international financial architecture to better support resilience. This is especially important for climate-vulnerable countries such as the members of the CVF-V20, many of which face high borrowing costs, growing debt overhangs and increasingly limited fiscal space to fund adaptation imperatives.

“The world is running out of time to fix its international financial system that is broken, outdated, infested with short termism and downright unfair”, said the Prime Minister. “These actions will take coordinated and courageous action at the highest levels, and we need to work together. That is why I think of Ubuntu – which means ‘I am because we are’ – acknowledging that it is in working together that we find the power of the collective and see real change”.

About the Bridgetown Initiative  

In July 2022, Prime Minister Mottley convened a high-level retreat in Bridgetown, Barbados, which resulted in the Bridgetown Initiative – a set of asks to address immediate financial needs while tackling systemic issues that leave us with a financial system which is not fit-for-purpose. The Bridgetown Initiative has helped make clear progress on this agenda including the inclusion of “debt pause clauses” in loans from governments and MDBs in the event of a natural disaster. Bridgetown has helped with other big wins including:  

1. The Loss and Damage Fund was launched at COP28 with an initial $700 million in commitments
2. The IMF created the Resilience and Sustainability Trust and just published guidance on integrating climate into its debt sustainability assessment framework
3. The G20 has committed to re-channelling more than $100 billion in Special Drawing Rights
4. The IDB, World Bank and other official sector lenders are including natural disaster clauses across a range of new and existing loan agreements
5. The ADB has unlocked $100 billion of additional lending through reforms to its Capital Adequacy Framework
6. The AfDB is increasing lending by raising hybrid capital from private investors
7. The World Bank has committed to tripling its guarantee capacity through MIGA, and other guarantee providers are scaling local currency offerings 
8. Currency hedging solutions and early-stage project pipeline facilities are being announced, with support from pooled philanthropic funds
9. Finance Ministers under Brazil’s G20 Presidency have committed to explore ways to tax the super-rich

About The Rockefeller Foundation  

The Rockefeller Foundation is a pioneering philanthropy built on collaborative partnerships at the frontiers of science, technology, and innovation that enable individuals, families, and communities to flourish. We make big bets to promote the well-being of humanity. Today, we are focused on advancing human opportunity and reversing the climate crisis by transforming systems in food, health, energy, and finance. For more information, sign up for our newsletter at www.rockefellerfoundation.org/subscribe and follow us on X @RockefellerFdn and LI @the-rockefeller-foundation.