UK Export Finance (UKEF) will become the world’s first export credit agency to introduce climate resilient debt clauses (CRDCs) into its loan agreements, it said in a statement.

These will provide low-income countries and small island developing states the ability to defer debt repayments in the event of a severe climate shock or natural disaster.

Additionally, the Private Sector Working Group, chaired by the UK Treasury, will launch a “model term sheet” to embed climate resilient debt deferral into standard bond and loan contracts. 

UKEF has provided over £7 billion of support for green and sustainable projects since 2019, the statement said.

The credit agency has a £2 billion direct lending facility to finance clean growth projects overseas.

(Writing by P Deol; Editing by Anoop Menon)