The Inter-American Development Bank (IDB) approved $250 million in financing to help Guatemala’s government prepare, supervise, strengthen and monitor its national climate change agenda and to develop an institutional framework for the plan’s implementation.
The project will lead to the establishment of the Interagency Commission of Climate Change, the issuance of a national climate change policy and the creation of climate change units in the Ministries of Finance (MINFIN) and Environment and Natural Resources (MARN). It will also help to create a National Policy for Disaster Risk Reduction that addresses the climate change variable. Disaster risk management will subsequently be incorporated in the 2012 working plans of several ministries.
In the area of mitigation, a methodology will be developed for offsetting greenhouse gas emissions using the principles of the UN Intergovernmental Panel on Climate Change. The program also includes a pilot project for energy efficiency and environmental measures for execution at MINFIN.
Adaptation is particularly important for Guatemala, one of the 10 countries most vulnerable to climate change in the world. It is also the fourth most vulnerable to natural disasters, according to the United Nations. So far this year Guatemala has been affected by the eruption of the Pacaya volcano, tropical storm Agatha, and the wettest rainy season of the last 60 years. These events have claimed 235 lives, forced the evacuation of 208,000 people, destroyed nearly 15,000 dwellings, caused major damage to road, educational and sanitation infrastructure, and threatened the food security of thousands of families. The government began to address the challenges of climate change in 1998. It has just completed preparation of a national policy on climate change.
This programmatic policy-based operation will be disbursed in four tranches, the first of $100 million and the other three of $50 million each over a total of 18 months. It will be accompanied by a parallel technical assistance package. MINFIN will be the program’s executing agency.
The IDB financing consists of a $213.2 million loan for 20 years with a variable interest rate based on LIBOR, a $29.4 million loan for 30 years with a fixed interest rate, and a $7.4 million concessional loan for 40 years with a 0.25 percent annual interest rate.
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