Loss and damage funding given to developing nations in the global south must not increase their debt burden, Scotland’s First Minister has said as he announced an extra £2 million.

At the Cop28 climate summit in Dubai, Humza Yousaf said the money will go towards urban communities in the global south.

The latest funding means the devolved government has donated £10 million to address loss and damage from climate change.

Former first minister Nicola Sturgeon announced the first round of funding at the Cop26 summit in Glasgow in 2021, with further money coming at Cop27 and the New York Climate Week.

The latest funding will go to C40 Cities – an organisation led by mayors around the world – and the charity GiveDirectly, which works in Malawi.

Speaking at an event in Dubai, the First Minister said: “I was very pleased to see the announcement by Cop in the opening days in relation to loss and damage.

“What our friends tell us in the global south is that, yes, you need to capitalise and you need to put money, but that also has to be fair.

“When it comes to the distribution of that money, it can’t add to the debt burden of countries in the global south.”

He went on to promise a minister from the Malawian government that the Scottish Government would “advocate alongside you the issue of fairness and that this money should go to the beneficiaries, and it should be grants, not high-interest loans that add to the debt burden”.

Cop28 summit
The Cop28 summit got under way earlier this week (Chris Jackson/PA)

In a statement announcing the increased investment, Mr Yousaf said: “Our world-first climate justice fund will continue to focus on communities most affected by climate change, and in order to deliver for those who need it most we must ensure the views and needs of those typically marginalised in such communities – particularly urban voices from the global south and youth perspectives – are heard.

“While of immense importance, we cannot just provide funding to deal with the effects of climate-induced loss and damage alone.

“Devolved governments have a crucial and essential role to play in addressing loss and damage, and the global journey to net zero – responsibility for over half of the emissions cuts needed at a global level lie with devolved state and regional governments.”

Yvonne Aki-Sawyerr, the mayor of Sierra Leone capital Freetown, said: “I thank the Scottish Government for its leadership in climate justice and support to C40.

“This funding will support cities in the global south to deliver for their residents through local inclusive climate action, building resilience and piloting innovative city-led approaches to loss and damage.”