each country, and they include the cost of making public capital more resilient to climate change. Country specific weighted average unit costs to construct and maintain infrastructure are used. The estimates incorporate higher depreciation rates in climate vulnerable SDS. To estimate the additional costs of making infrastructure climate resilient they incorporate country specific costs and other factors which vary between countries according to differences in climate vulnerability, geographic location and other structural factors.

The authors estimate that the total capital and recurrent costs of meeting the SDG targets in the three infrastructure sectors analyzed would average 3.7 percent of 2030 GDP every year until 2030, with an additional 3.0 percent of GDP of spending required in the two social sectors. Costs are higher than these averages in the lower middle-income SIDS. For the roads sector, the costs of making roads climate-resilient accounts for a median of 18 percent of total infrastructure costs, but there is wide variation between the 25<sup>th</sup> percentile (2 percent) and the 75<sup>th</sup> percentile (39 percent). They do not provide estimates of the cost of climate resilience for other types of infrastructure, acknowledging that this requires more in-depth country specific analysis. If we apply the same median estimate for the roads sector (18 percent of the capital costs of new roads), to the other sectors (power and WASH) it would imply that making infrastructure climate-resilient would cost around 0.7 percent of 2030 GDP across all three infrastructure sectors. However, this might be an underestimate, as there could be additional investments needed for infrastructure other than roads, power or WASH. For example, some SIDS may need to invest in infrastructure to protect shorelines from erosion by rising sea levels.

Hallegatte et al (2019) make estimates of the cost of strengthening the resilience of public infrastructure in power, transport and water sectors in low income countries (LICs) and lower middle income countries (LMICs). They show that the costs are very sensitive to the technical and engineering specifications required. If the specific hazards to which assets are exposed are known—so that the technical and engineering standards can be applied specifically to counter these hazards—the costs are much lower than if uniform standards are applied to the entire infrastructure network on the assumption that the specific hazards facing each asset are unknown or are too uncertain.

# **4. How critical is the public debt burden in the SIDS?**

# **_4.1 Public Debt Ratios and Risks of Debt Distress_**

The characteristics of public debt, in regard to its magnitude, composition, and threats to debt sustainability, vary widely among SIDS. Table 4 provides data for 34 of the 39 SIDS which are UN member states,<sup>17</sup> based on the risk evaluation in the most recent IMF/World Bank Debt Sustainability Analysis (DSA). Table 5 provides data on the size and composition of the debt and, where available, the present value of total public debt and external public debt to GDP relative to the applicable thresholds.<sup>18</sup> The risk rating in the DSA analysis is determined by several factors, notably the current levels of public debt relative to the applicable thresholds for

> 17 The tables omit Singapore and Bahrain, which are both high income countries, Kiribati and Cook Islands because no recent DSA is available and Cuba which is not a member of the IMF/World Bank.

> 18 The DSAs used as sources for the data in this paper were all conducted in 2021, 2022 or 2023.

16