Germany and the IDB are fostering fiscal policies to address climate change and promoting sustainable, resilient and inclusive economic development in Latin America and the Caribbean
Inter-American Development Bank (IDB) President Ilan Goldfajn and Niels Annen, parliamentary state secretary to Germany's Federal Minister for Economic Cooperation and Development, met in Washington, D.C., to discuss ongoing joint efforts and celebrate recent achievements of the partnership between the IDB and Germany.
Among the topics discussed was the IDB's Amazon Initiative, launched in 2021 to promote sustainable, resilient and inclusive economic development models in the Amazon region. As the first donor to the Amazon Bioeconomy and Forest Management of the Amazon Initiative, Germany contributed €15 million toward the Multi-Donor Trust Fund. The Netherlands, Switzerland, and the United Kingdom subsequently joined.
The Multi-Donor Trust Fund is one of the three financing mechanism of the Amazon Initiative, and it focuses on three main lines of action: resilient and diverse landscapes, Amazon-positive value chains and sustainability in commodity supply chains. The collaboration also focuses on empowering indigenous peoples and local communities, with targets dedicated to ensuring their prioritization as beneficiaries.
Goldfajn and Annen also discussed the additional contribution of €10 million by Germany’s Federal Ministry for Economic Affairs and Climate Action (BMWK) to the Fostering Fiscal Policy for Climate Change in Latin America and the Caribbean Fund, which was launched in 2021 with €17.5 million from the government of Germany. The IDB-led fund supports country-specific technical assistance to help ministries of finance develop and implement fiscal policies to address climate-change challenges in the region. It also fosters a regional dialogue and supports the integration of climate change into economic and fiscal policies.
Another recent German collaboration with the IDB is KfW Development Bank's funding support to the two phases of policy-based loans for sustainable and resilient growth in Colombia. This program, which also received support from other donors, funded climate action, promoted economic opportunities based on natural capital and the circular economy, accelerated the energy transition, and enhanced the government's capacity to integrate climate action and sustainable economic recovery into national policy frameworks. In addition, the IDB and KfW have long partnered in the greening of financial markets through initiatives such as LAGreen and the Green Bond Partnership.
A final topic covered was gender, diversity and inclusion, with Annen lending his support for a stronger focus on this area in the partnership, in line with Germany’s new feminist development policy.
"We are grateful for our partnership with Germany, which has been instrumental in advancing the IDB's agenda on climate change and sustainable development in the region,” said President Goldfajn. “We look forward to continuing our collaboration with Germany and other partners to support our borrowing member countries in their efforts to tackle climate change, protect biodiversity and promote sustainable development, as well as address gender diversity and inclusion and other pressing social issues.”
“We welcome the IDB’s commitment to climate action. As a regional bank, the IDB plays an integral role in the fight against climate change and supporting a 'just transition' towards a sustainable, inclusive and resilient future in Latin America and the Caribbean,” said Parliamentary State Secretary Annen. “Germany reaffirms its dedication and commitment to supporting the IDB in these endeavors.”
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