Date: April 25, 2025

Time: 4.30 pm to 6.30 pm (with drinks and snacks)

Location: State Plaza Hotel, 2117 E Street, N.W., Washington, D.C. 20037

Hosted by: Co-Chairs of the Strategic Advisory Group, H.E. Gaston Alphonso Browne, Prime Minister of Antigua and Barbuda, and H.E. Dr. Mohamed Muizzu, President of the Maldives

Context

The Small Island Developing States (SIDS) face unique challenges exacerbated by climate change and structural vulnerabilities within the global financial architecture. Despite contributing less than 1% of global greenhouse gas emissions, SIDS experience disproportionate economic losses due to climate-induced disasters. According to IIED’s research Sinking islands, Rising debts, the frequency and intensity of these disasters continue to escalate, threatening economic stability and undermining development gains. SIDS constitute two-thirds of the countries experiencing the highest relative annual losses from natural disasters, creating a ripple effect of escalating debt and fiscal distress. Over 40% of SIDS are nearing or already in debt distress, and an alarming 70% exceed the debt-to-GDP sustainability threshold of 40%, with six SIDS surpassing 100%. This crisis is not only a financial burden but also a major constraint on social services, climate adaptation, and resilience-building investments, further exacerbating poverty and inequality. Additionally, unsustainable debt levels divert critical resources from essential public services and impede progress towards the Sustainable Development Goals (SDGs).

To address these interlinked challenges, the Strategic Advisory Group (SAG), co-chaired by H.E. Gaston Alphonso Browne, Prime Minister of Antigua and Barbuda, and H.E. Dr. Mohamed Muizzu, President of the Maldives, has been driving forward the Global Debt Sustainability Support Service (DSSS). The DSSS was officially launched as part of the Antigua and Barbuda Agenda for SIDS (ABAS) at the SIDS4 Conference in May 2024, following its endorsement by the UN General Assembly. Designed as a holistic financial mechanism, DSSS integrates debt sustainability solutions, resilience investments, climate insurance, and capacity-building measures to help SIDS navigate the challenges of debt distress and climate vulnerability.

Recognising the broader global relevance of DSSS, the Fourth International Conference on Financing for Development (FFD4) has included the DSSS in its Draft Outcome Document, signalling strong international recognition of its value as an innovative financial mechanism. The FFD4 document mandates the operationalisation and expansion of DSSS beyond SIDS to include Least Developed Countries (LDCs), and Landlocked Developing Countries (LLDCs). This reflects a global consensus that debt sustainability and climate resilience must be addressed in tandem, particularly in vulnerable economies that lack the fiscal space to invest in adaptation and sustainable development.

Following these milestone, the SAG formally launched the operational phase of DSSS, marking the transition from conceptualisation to action. The operational phase focuses on establishing governance structures, securing institutional partnerships, and mobilising financial resources for effective delivery. It aims to develop aggregate mechanisms for debt sustainability, introduce resilience bonds to attract private sector investment, design tailored insurance products to mitigate climate-related financial losses, and provide targeted capacity-building support to participating countries.

Purpose and Objectives of the Side Event

This high-level side event at the World Bank Spring Meeting will build on these advancements by bringing together ministers, heads of state, and senior leaders from international finance, climate policy, and development to refine DSSS’s operational roadmap, mobilise partnerships, and accelerate its expansion to LDCs, and LLDCs, covering the following:

• Defining a country led governance and operational vision: This event will outline how DSSS can expand beyond SIDS to support LDCs, LLDCs, and other climate-vulnerable nations while maintaining a country-led governance model. Discussions will focus on ensuring SIDS leadership, integrating other vulnerable countries, and shaping an operational structure that is responsive, accountable, and regionally tailored. The event will also explore DSSS’s positioning within international financing frameworks to ensure transparency, adaptability, and long-term sustainability.

• Forging a high level partnership alliance: Strong partnerships are key to DSSS’s success. This event will bring together governments, financial institutions, development banks, insurers, and the private sector to build a high-level coalition. Discussions will define the roles of multilateral institutions in financing and technical support while exploring co-financing models, blended finance, and technical assistance pathways to ensure DSSS has the backing needed to achieve its goals.

• Identifying anchor partners for DSSS components: A critical step in DSSS’s operational phase is assigning anchor institutions for each core component. This event will help determine which organizations are best suited to lead in areas such as debt sustainability, future protection, resilience investment, and legal advisory support. Discussions will identify key players—such as the World Bank, IMF, ADB, CDB, and climate insurance providers—to establish a structured, multi-stakeholder approach for delivering DSSS services effectively.

• Generating practical solutions for operationalisation: Beyond governance and partnerships, this event will focus on concrete steps to implement DSSS. Participants will assess how existing debt relief mechanisms, financial instruments, and insurance models can be integrated into DSSS. The discussion will also address financing gaps and explore new instruments, such as resilience bonds, climate-contingent debt instruments, and concessional finance mechanisms, to ensure DSSS remains adaptable and regionally relevant.

• Aligning DSSS with broader global financial reforms: DSSS must align with broader efforts to reform the global financial system to better support climate-vulnerable nations. This event will explore how DSSS can be embedded into international financing frameworks such as FFD4 and G-20, while also advocating for credit rating reforms that factor in climate vulnerability and resilience investments. By linking DSSS to these larger reforms, the initiative can drive systemic change in global debt sustainability frameworks, ensuring long-term solutions for vulnerable economies.