Apr 30, 2012
Canada, IDB to co-finance climate-friendly investments in Latin America and the Caribbean
Canada commits 250 million Canadian dollars to IDB-managed Fund
Canada has selected the Inter-American Development Bank (IDB) as a key partner in its Fast Start commitment to support climate change mitigation and adaptation.
Canada has committed 250 million Canadian dollars to create the Canadian Climate Fund for the Private Sector in the Americas, a fund that will be managed by the IDB. The fund will finance private sector climate mitigation and adaptation projects in Latin America and the Caribbean that need concessional financing to become viable.
“The private sector is a key player in helping countries address climate change. The Canadian Climate Fund will go a long way in moving the needle on innovation and helping reduce the gap in financing for climate-friendly projects,” said IDB President Luis Alberto Moreno. “We thank the Canadian government for providing the resources to create this fund and are grateful for its decision to partner with the IDB.”
"Fostering active private sector participation, especially innovative initiatives that generate jobs, is an important component of our efforts to make our international assistance more effective," said Canada's Minister of International Cooperation, Beverley J. Oda. "Through this Fund, the IDB will be helping to finance climate-related initiatives, helping to stimulate sustainable economic growth and deliver better results which will benefit Latin America and the Caribbean as a whole."
The Fund aims to mobilize private sector investment in cleaner technologies, which often have higher initial costs and longer pay-backs than fossil fuel technology.By making these projects viable, the Canadian Climate Fund is expected to pave the way for up to $5 billion in climate change investments, which are expected to contribute to a reduction of up to 50 million metric tons of greenhouse gas emissions over the fund’s 25-year life.
“A key aspect of the Canada Climate Fund is its ability to level the playing field,” said Hans Schulz, General Manager at the IDB’s Structured and Corporate Finance Department. “Canada’s partnership offers us a tremendous opportunity to expand our support for climate-friendly projects in our member countries.”
Projects supported may include renewable energy, energy efficiency, agriculture and forestry greenhouse-gas emission-reduction projects, as well as adaptation projects to reduce climate change vulnerabilities. The fund will make up to half of its capital available for loans and guarantees in local currency.
This $250 million investment is part of Canada’s 1.2 billion-Canadian dollar contribution to the Fast Start financing to support developing countries' efforts to reduce greenhouse gas emissions and adapt to the adverse impacts of climate change.
About the IDB’s Structured and Corporate Finance Department
The IDB is the biggest multilateral lender for Latin America and the Caribbean. The IDB’s Structured and Corporate Finance Department (SCF) leads the Bank’s non-sovereign guaranteed operations for large-scale projects, as well as those linked to companies and financial institutions. Last year alone, SCF approved $736 million in financing for private sector climate-friendly projects, leveraging over $4.1 billion in additional climate change investments.