- Debt pause clauses allow for the postponement of debt servicing during climate, health, or other crises, freeing up resources for response and recovery without compromising long-term economic and social sustainability.
- The initiative, led by Spain and co-led by the EIB, is part of the agreements reached at the IV International Conference on Financing for Development, held in Seville.
- The alliance remains an open and flexible coalition and brings together many countries and major multilateral banks
Spain, with the support of other countries and major multilateral development banks such as the European Investment Bank Group, unveiled the Debt Pause Clause Alliance at the IV International Conference on Financing for Development in Seville.
These clauses allow for the temporary suspension of debt payments in the face of extraordinary events — such as natural disasters, food crises, or health emergencies — offering borrowing countries immediate fiscal space to respond to the crisis without jeopardizing their solvency or their ability to meet social expenses. Their adoption promotes a more resilient and predictable development financing framework in times of crisis.
The alliance is an international coalition that seeks to accelerate the systematic inclusion of these clauses in public and private financial instruments. Additionally, it seeks to develop common principles and standard contractual language, thus generating transparent regulation that mobilizes the private sector.
The co-leaders of the initiative include the Inter-American Development Bank, the European Investment Bank, the African Development Bank, the Development Bank of Latin America and the Caribbean, the Asian Development Bank, as well as the governments of Barbados, Canada, Spain, France, and the United Kingdom.
The EIB has made Debt Pause Clauses available for contracts on its new operations in 70 countries.
“As the financial arm of the European Union, the EIB is offering solutions to countries and communities to ensure the most vulnerable are not left behind. In the past year, the EIB has made climate resilient debt clauses available to 70 developing countries around the world. Today, we show our commitment to global partnerships for prosperity, win win outcomes and peace,” said Nadia Calviño, president of the European Investment Bank.