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IDB approves multi-donor trust fund to support sustainable project delivery

The Inter-American Development Bank (IDB Group) approved the NDC Pipeline Accelerator Multi-Donor Trust Fund (ACL), a new instrument to increase support for enhancing the planning, design and preparation of infrastructure projects and portfolios. The ACL will help countries in Latin America and the Caribbean align public and private-sector investments with their national commitments under the Paris Climate Agreement (referred to as Nationally Determined Contributions, NDC) and sustainable development objectives. The ACL has been initially funded with €10 million from the Nordic Development Fund (NDF).

The ACL, the second component of the recently launched IDB Group’s NDC Invest platform, will focus on supporting public and private partners throughout the project cycle, with an emphasis on upstream policies and planning and other pre-investment activities to integrate sustainability into project design and assessments. The ACL will cover the additional costs associated with ensuring that projects are planned, designed and executed to be sustainable—in terms of low-carbon emissions and climate resilience, in addition to other social, fiscal and environmental sustainability objectives.

Among other key activities, the ACL will finance studies or action plans to incorporate sustainability in procurement practices; detailed engineering designs, climate risk assessments, resilience integration plans, and feasibility studies of technologies or financing schemes for sustainable projects or portfolios; and application of pilot approaches, tools, and sustainability standards.

“Enhanced support mechanisms are an important foundation for efforts to increase the sustainability of investments,” said Bernardo Guillamón, Manager of the IDB’s Office of Outreach and Partnerships. “NDF’s partnership in this space is essential to facilitating the identification and planning of bankable projects, and will help to mobilize financial resources from global markets for advancing NDCs.”

The new instrument forms part of the IDB Group’s strategy to help fund investment to fill the region’s sustainable infrastructure gap, including innovation to leverage capital markets financing, a subject addressed in the recent report published jointly by the IDB and the leading global consulting firm Mercer, Crossing the Bridge to Sustainable Infrastructure Investing. Work on sustainable infrastructure within the IDB Group is the joint responsibility of the Managers of the Bank’s Infrastructure and Environment and Climate Change and Sustainability Sectors, together with the Chief Investment Officer of the Inter-American Investment Corporation.

The IDB Group has an indicative goal of $20 million for the first phase of the ACL, half already committed by the NDF, and is seeking partnerships to contribute towards that target. “NDCs represent a progressive global blueprint for limiting global warming and building climate resilience,” commented NDF Managing Director Pasi Hellman, adding, “implementing this blueprint means transforming NDCs from targets on paper into a robust pipeline of projects as quickly as possible.”

About the IDB

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.

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