China and petrostates given millions in climate loans

China and wealthy petrostates including Saudi Arabia and the UAE are among countries receiving large sums of climate finance, according to an analysis.

- Carmen Aguilar García, Ajit Niranjan, Josh Gabbatiss

The Guardian and the Carbon Brief website analysed previously unreported submissions to the UN along with data from the Organisation for Economic Cooperation and Development (OECD) that show how billions of dollars of public money is being committed to the fight against global heating. The investigation found a broadly functioning system that shifts capital from rich polluters to vulnerable nations, helping them clean their economies and adapt to a hotter world.

But it also found that because the distribution of the largest part of the funds had no central oversight and was entirely at the discretion of individual countries, it was subject to political interests and not always directed where it was most needed.

Although official data is not extensive enough to trace all the recipients of climate finance, the Guardian analysis found that about a fifth of the funding in 2021 and 2022 went to the world's 44 poorest countries, known as the least developed countries (LDCs). Much of that was in the form of loans rather than grants.

Some LDCs received more than two-thirds of their climate finance in the form of loans, whose repayment terms can push governments further into debt traps. The share of loans rose to 95% or more in the cases of Bangladesh and Angola.