This bill aims to support developing countries in adapting to the effects of extreme weather events and slow-onset climate disasters by providing mechanisms for debt reduction. It amends the Foreign Assistance Act of 1961 to allow the President to reduce debt owed to the United States by eligible low, lower-middle, or upper-middle income countries, or small island developing states, provided they have democratically elected governments, uphold human rights, and commit to using freed resources for resilience activities, preventative disaster risk reduction, or recovery efforts.

The legislation specifically authorizes the President to engage in debt-for-resilience swaps, where debt is reduced in exchange for a country's commitment to climate resilience activities, and to facilitate debt buybacks by eligible countries for the same purpose. It also allows for the purchase of privately owned debt to facilitate these swaps, ensuring that financial relief directly contributes to climate adaptation and mitigation efforts.

Furthermore, the bill mandates that U.S. Executive Directors at international financial institutions advocate for policies that reduce or restructure the debt load of climate-vulnerable countries, including debt forgiveness, debt buybacks, and debt-for-resilience/nature swaps. This aims to leverage multilateral institutions to amplify debt relief efforts for climate adaptation.

Finally, the bill directs U.S. representatives to the World Bank to advocate for the establishment of a parametric international climate insurance program. This program would provide immediate financial assistance to eligible countries following natural disasters, supporting recovery needs such as program restoration, disaster cleanup, climate adaptation, and ecosystem restoration, with eligibility criteria similar to those for debt reduction.