The Inter-American Development Bank (IDB) and the Organization for Economic Cooperation and Development (OECD) opted this Friday for “innovative financial instruments”, such as bonuses green or debt-for-nature swaps, to have more resources that finance the development of Caribbean.
“We need innovative financial instruments. Bonuses green, blue, sustainability, bonuses efficient,” the president of the IDBIlan Goldfajn.
In the presentation of the Development Dynamics of the Caribbean 2024, prepared by the Development Center of the OECD and the IDBGoldfajn noted that “financial innovation will help mobilize resources“.
The president of IDB He indicated that this type of innovation is already being carried out and that innovation is being made with the clauses, with loans that include catastrophe clauses.
Goldfajn cited the recent case of Barbados, which successfully completed the world’s first debt-to-climate resilience operation to finance water and sewage projects resilient to the climate crisis.
As announced earlier this month, the Caribbean country replaced more expensive outstanding debt with more affordable financing, generating fiscal savings of $125 million, which will be used to improve debt management. resources water resources and increase food security.
To close that loan, CIBC Caribbean received $300 million in guarantees from equal parts of the IDB and the European Investment Bank (EIB).
This case was cataloged during the conference by Ragnheiður Elín Árnadóttir, director of the Development Center of the OECDas “an outstanding example.”
The director of the Development Center of the OECD He highlighted that the report presented this Friday speaks of “innovative green financing”, for example with “bonuses innovations or debt-for-nature swaps.
The Development Dynamics report Caribbean 2024 calls in fact to take advantage of the potential of innovative debt instruments, which the Caribbean has been leading, to channel resources towards social, green and blue development objectives.
Along the same lines, the report recommends promoting sectors with a high development potential such as economy blue, renewable energies, sustainable tourism and transport, economy circular and nature-based solutions.
It also advises investing in resilient infrastructure, early warning systems and climate change adaptation policy instruments, to address high exposure to climate threats.
The report focuses its analysis on 15 countries in the Caribbean: Antigua and Barbuda, Barbados, Bahamas, Belize, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname and Trinidad and Tobago. EFE
