Laurie van der Burg is global public finance campaign manager at Oil Change International. Mariana Paoli is global advocacy lead at Christian Aid. Rebecca Thissen is global advocacy lead at Climate Action Network International.

While climate disasters intensify across the Global South, another connected crisis is quietly unfolding – one with less media coverage, but just as deadly. Governments are drowning in debt, and the money they need for clean energy and resilience is flowing not into solar panels, but to creditors in the Global North.

Meanwhile, the US is on a mission to make this debt and climate spiral even worse: it is pressuring the World Bank and other global institutions to abandon climate action and to instead use their public funds to underwrite the private profits of American and multinational corporations, including through investments in fossil fuels.

Climate shocks and volatile currencies hike debt burden for poor countries

At meetings this week in New York to prepare for the United Nations’ 4th Financing for Development conference (FfD4) that will take place in Seville in June, countries face a clear choice: reject these attempts – including US efforts to weaken its outcomes – or lay the foundation for a renewed financing framework in Seville – one that will ensure the world’s poorest countries get the resources they need to survive.

A system built to extract

Many Global South countries now spend five times more on debt repayments than on climate action. Some cannot rebuild after floods or droughts because they’re paying interest on loans from decades ago. Others remain dependent on expensive fossil fuel imports – or stuck exporting oil and gas just to stay afloat.

This isn’t misfortune – it’s design. The global financial system was built by – and continues to benefit – the rich countries that did the most to cause the climate crisis. Today, they are demanding loan repayments from those who contributed the least, while offering “climate finance” largely in the form of new debt.

Ghana, for example, received over $2 billion in World Bank financing for oil and gas projects, yet project delays have left it reliant on expensive fossil fuel imports. On top of that, “take or pay” contracts that guarantee profits for foreign investors but not public coffers are costing the country over $1 billion a year, while many Ghanaians still lack access to affordable energy.

This is not an isolated case. Many countries are trapped in a vicious cycle of relying on fossil fuel extraction to service their debts, fueled by conditions imposed by international financial institutions like the International Monetary Fund (IMF). A study from the ODI think-tank found that debt levels rose sharply in the last decade in major oil and gas exporting countries across the Global
South.

Global South countries have the solutions

Global South groups – such as the African Group and the Alliance of Small Island States (AOSIS) – have put forward clear, workable solutions. They have successfully pushed for establishing a UN Tax Convention to close tax loopholes and stop the outflow of wealth through tax havens, negotiations for which are ongoing. They have also repeatedly called for dramatically increased public, grant-based climate finance.

Global billionaires tax to fight climate change, hunger rises up political agenda

With 2025 declared a Jubilee year for debt forgiveness by the late Pope Francis, the calls for debt cancellation and to adopt a UN Sovereign Debt Convention have become impossible to ignore. The current draft text for FfD4 calls for a process to establish such a Convention, which would provide an alternative to the insufficient attempts to tackle the debt crisis by the G20 and the IMF, and finally put debtor and creditor countries at equal footing.

The Convention could set up a multilateral sovereign debt resolution mechanism to deliver faster and fairer debt restructurings and cancellation. It could develop a new approach to debt sustainability framework and analyses (DSAs), ensuring that