This is the second in a series of events exploring the relationship between private finance and aid. It will be an opportunity to launch a report by Eurodad’s Farwa Sial and C.P. Chandrasekhar on guarantees for development and climate action.

Guarantees are increasingly being utilised as an instrument of development and climate finance. This has raised serious concerns among CSOs about the role of ODA and for what purpose, and about their alignment with a climate justice agenda. Guarantees can be understood as legally binding agreements under which a guarantor agrees to pay part or the entire amount due on a loan, equity or other instrument in the event of non-payment by the obligor or loss of value in case of investment.

As an outcome of last year’s PSI agreement it is now possible to quantify the “donor effort” of guarantees as ODA by applying a discount rate percentage to the guarantee amount. If the guarantee is eventually called in, then the full “grant equivalent” can be reported as ODA. In short, guarantees can be counted as ODA. Nevertheless, each donor has implemented guarantees in its ODA model in different ways and the impact of new PSI rules on guarantees remains to be seen.

To unpack these new developments, this panel will discuss the implications of counting guarantees as ODA and issues related to measuring financial and development additionality. At the same time, taking place right after COP29, it will be an opportunity to place this discussion in the broader trends of an increasing role of private finance in development and climate action.

Speakers

• Farwa Sial, Eurodad 
• Thea Sofie Rusten Grastveit, Debt Justice Norway 
• Asa Thomasson, Swedish Concord
• Mariana Paoli, Christian Aid
• Matthew Simonds, Eurodad (moderator) 

Rewatch the webinar in English and Spanish: