Century bonds: A Potential Game-Changer for Development Finance
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Published September 4, 2025
BEIJING – A novel financial mechanism – 100-year, ultra-low-interest bonds issued by wealthy nations to multilateral development banks – is gaining traction as a potential solution to the growing crisis in development financing. This approach, advocated by experts like Hannah Wanjie Ryder, aims to bypass the political and financial constraints hindering conventional donor grants and unlock significant capital for low- and middle-income economies.
The current System is Failing
The world’s most vulnerable nations have consistently voiced their dissatisfaction with the existing development finance system. At recent climate conferences and thru initiatives like the Bridgetown Initiative, governments have increasingly demanded increased and improved financial support from wealthier countries. The current system is demonstrably not meeting the needs of those most impacted by climate change and lacking resources for enduring development.
The Century Bond Proposal
Ryder proposes that instead of relying on politically sensitive and often burdensome traditional grants, richer nations could issue long-term bonds with exceptionally low interest rates.These bonds would be purchased by multilateral development banks, providing a predictable and substantial stream of capital for development projects. This isn’t a radical idea; similar mechanisms have been used in the past.
Why Century Bonds Could Work
The key benefit of this approach lies in its potential to circumvent current roadblocks.Traditional aid is often tied to political conditions or suffers from inconsistent funding. Century bonds offer a more stable and predictable financial instrument. The long-term nature of the bonds aligns with the long-term needs of development projects, allowing for sustained investment in crucial areas like infrastructure, climate adaptation, and education.
A Potential “Game-Changer”
Ryder argues that this simple shift in financing strategy could be a “game-changer” for developing economies. By providing access to long-term, low-cost capital, it could empower these nations to invest in their own futures and build more resilient economies. The proposal addresses the growing concerns about the adequacy and effectiveness of current development finance mechanisms.
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