By Tarek Salame
At the UN Finance Summit in Seville, the Spanish government committed nearly two billion dollars in reserve assets to support developing nations. Spain is redirecting its funds through the IMF’s poverty fund and launching new platforms to help poorer countries exchange debt for healthcare, education, and climate resilience.
While bigger powers hesitated, Spain stepped forward with a model that could reshape how development is funded, not through loans or new aid, but by reworking the money already owed. We’ll see how this plan works, why Spain is implementing it now, and what it might mean for the way rich nations support the rest of the world, not just in promises, but in practice.
What Spain just pledged
Spain’s announcement at the UN Summit will redirect $1.9 billion worth of its IMF Reserve assets, known as Special Drawing Rights (SDR), to support low-income countries. The money will flow through the IMF’s Poverty Reduction and Growth Trust, a fund that offers low-interest loans to the world’s poorest nations.
The goal is to help countries facing climate shocks, healthcare gaps, and fragile economies recover without incurring new, crushing debt.
Spain has committed to rechanneling up to 50% of their total SDRs, which is worth around €5.5 billion, into global finance mechanisms that are designed for the public good and not just bank balances.
Why now? The UN’s development goals are lagging, and traditional funding—grants and long-term loans—isn’t filling the gap fast enough.
That’s why SDRs, which are typically held as emergency buffers, can be activated for impact without raising taxes or incurring additional borrowing.
The new debt-swap and how it works
Here’s how it works in practice.
A country with all its external debt to Spain can renegotiate those repayments. But instead of just deferring or cancelling what’s owed.
That money is redirected into domestic projects. Think of upgrading schools, restoring forests, building clean water systems, and investing in local health infrastructure.
The debtor country would still pay, but the payments stay within its own economy, and the money that goes towards long-term resilience instead of interest fees. Spain’s new hub is backed by the World Bank, which will offer both technical guidance and limited seed funding.
So far, Madrid has pledged €3 million to get it running enough to set up the framework to attract other partners and help countries design credible plans that qualify for these swaps.
Spain is proposing a modern version of nature swaps, designed for scale, with increased transparency tied to measurable outcomes and integrated with climate health and educational goals.
Spain moved. The US didn’t.
Washington did not attend the city summit. There was no public commitment, only silence, at a time when global development talks increasingly relied on coordination between rich nations and institutions that they helped fund.
The UN officials frame Spain’s actions as a part of a stabilising front, but behind the scenes, there are concerns that the lack of US engagement can stall broader reform, especially around SDR allocation and climate-linked lending.
Within Europe, the reactions have been more cautious than unified:
Germany, which is often conservative on international lending, has so far refrained from committing large volumes of its own SDRs.
France has voiced support for financial reform, but hasn’t mirrored Spain’s specific pledges.
Meanwhile, smaller nations such as Belgium and Ireland have not yet acted and are simply observing.
For Spain, this creates both risk and opportunity, and on the one hand just stands out alone. On the other hand, it shapes the rules of an emerging world model, where development aid is less about new money and more about redirecting existing capital towards measurable outcomes.
Rewriting the global finance
Spain’s plan to reallocate SDRs and launch at that swap hub won’t change the system itself, but it will reframe it not just as a burden, but as something that can be negotiable, reworkable, and, in the right structure, redeemable.
If this model catches on, it will reshape how development is funded, with a reduced reliance on charity and increased influence. If it doesn’t, then Spain will still leave behind the message that even middle parts can build something new when others look away.