Making sure that debt levels are sustainable is a key part of reducing poverty in developing countries. Many developing countries have made progress on this over the last 15 years, but I know that other countries' debt levels are rising at an unsustainable level.
I was pleased to learn that most of the Department for International Development's (DFID) work is done through grants and my ministerial colleagues do not intend to provide UK bilateral aid as loans. I understand that any use of loans would be on a case-by-case basis, but so far none have been approved by the Government.
DFID's contributions to organisations like the World Bank help developing countries gain access to finance below market-rates. Where developing countries are in high-risk of, or in, debt distress, they receive grants from the World Bank rather than loans. For countries with more sustainable debt, World Bank loans are provided at highly concessional rates and the International Development Association's interest rate is 0 per cent.
Action is also happening on the international stage - discussions at the G20 and Financing for Development in Addis Ababa recognised the role of both lenders and borrowers acting responsibly to promote debt sustainability. I understand the International Monetary Fund is also reviewing the way they analyse debt sustainability.