This article examines the increasing foreign indebtedness of less-developed countries (LDCs) and the impact of their vulnerability to climate crises and economic shocks. The paper explores dependency theory, which highlights the unique challenges faced by LDCs in the global economy. It discusses different financial arrangements, including full public sector involvement, full private sector involvement, and public-private partnerships (PPPs), in the context of sustainable development projects. The goal is to identify the most efficient approach to allocate funds and resources, maximize net benefits, and promote sustainable growth in LDCs. The analysis concludes that PPPs, particularly in the form of blended finance, are more effective than solely public or private sector interventions in addressing the needs of LDCs.