Nicola Ranger, Carlo Pasqua and Christopher Adam

Ranger, Pasqua and Adam (2025). Integrating Nature into the IMF-World Bank’s Debt Sustainability Framework for Low Income Countries. CLimate, Environment, and Nature (CLEAN) Helpdesk

This report investigates the rationale, feasibility, and implications of integrating nature-related risks into the IMF-World Bank Low-Income Country Debt Sustainability Framework (LIC-DSF). The LIC-DSF is a core tool for assessing debt vulnerabilities in low-income countries (LICs), with significant influence on IMF-World Bank surveillance, concessional financing terms, and broader macroeconomic policy frameworks, as well as private investment and costs of capital. In light of the 2024 IMF–World Bank review of the LIC-DSF’s effectiveness, this report evaluates whether nature-related risks meet the threshold of macro-criticality as defined in IMF surveillance guidance and whether they can be systematically integrated into the framework.