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Background Papers

Feb 27, 2007

The IDB and the environment

The Inter-American Development Bank last year approved 19 environmental operations for a total of $538 million and approved and implemented a new environment policy that will apply to all IDB-financed projects.

Most of last year’s environmental loans were in the areas of water and sanitation, disaster risk management, natural resource management and sustainable tourism. In addition, the Bank approved 82 grants totaling some $20 million for projects in these same areas, as well as for strengthening environmental policy and institutions, coastal management and sustainable agriculture.

Projects approved last year included a program to improve sanitation in Quito, Ecuador, that will ensure universal access to safe drinking  water, sanitation services for all city residents, and will control flooding. In Guatemala, a new initiative that builds on a sustainable development program in the department of Petén will protect the Mayan Biosphere Reserve. Among other activities, the Petén program will create five tourism circuits that will benefit local communities while protecting outstanding natural and cultural sites.

Also approved was a $3.5 million technical cooperation grant under the Global Environmental Facility to implement a management plan for the first trinational park in the Americas. Located in the Trifinio Region on the borders of El Salvador, Guatemala and Honduras, the project will help to protect ecosystems containing at least 3,000 species of plants and animals, as well as a cloud forest that plays a critical role in supplying water resources.

The IDB also prepared a set of implementation guidelines for the Bank’s Environment and Safeguard Compliance Policy, which had been approved earlier in the year. The policy aims at mainstreaming environmental protection principles throughout the institution’s lending and technical cooperation operations. Its provisions are consistent with the highest standards currently prevailing among public and private international financial institutions, including the Equator Principles that have been adopted by private and national banks.

Among the policy’s directives are early identification of environmental risks and opportunities; a shift in emphasis from identifying environmental impacts to managing risks; the establishment of effective procedures for managing environmental, social and cultural risks; early on engagement with communities affected by projects; support for biodiversity by focusing on transboundary areas, conservation and protection from threats to natural ecosystems; quantification and monitoring of project greenhouse gas emissions; and analysis of policy-based loans for risks and opportunities for environmental and social sustainability.

The new policy was developed with input from governments, nongovernmental organizations, the private sector and multilateral and bilateral development agencies, including a Blue Ribbon Panel chaired by former United States. Interior Secretary Bruce Babbitt. 

Measures put in place last year to implement the policy include the development of software to help classify projects for their potential to impact biological diversity and local communities. Also now in use is a policy handbook that provides information on all environment-related policies, guidelines and other material produced by IDB and an update of the technical guidelines used by the IDB’s Private Sector Department to ensure consistency with the Environment Policy.

As part of policy implementation, all Bank staff will receive a training in 2007 and 2008.

The IDB began  a comprehensive evaluation of the environmental impacts resulting from its own activities. It carried out a pilot greenhouse gas inventory of activities related to the Bank’s corporate activities and its Annual Meeting. Last year’s Annual Meeting was carbon neutral, as is the 2007 Annual Meeting in Guatemala.

 

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