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IDB exceeds climate change, environment lending goals

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Report monitors progress by the Inter-American Development Bank on sustainability issues, focuses on water management challenges

PANAMA CITY – The Inter-American Development Bank (IDB) committed $3.75 billion for projects that deal with climate change, sustainable energy and environmental sustainability in 2012. This amounted to one-third of its total approved lending last year and surpassed the 25 percent target set for 2015, according to the IDB’s annual Sustainability Report unveiled here today.

The publication—a detailed report on the IDB’s efforts to help bring about development in Latin America and the Caribbean in a way that maximizes positive environmental impacts and minimizes risks—was issued ahead of the Bank’s Annual Meeting in Panama, on March 14–17. The IDB is the leading source of multilateral funding for Latin America and the Caribbean.

Last year, the IDB approved 169 projects for $11.4 billion. Of these, 45 qualified as supporting initiatives related to climate change, sustainable energy and the environment, totaling $3.75 billion. The 25 percent goal was established in the IDB’s General Capital Increase, approved in 2010.

The Sustainability Report also includes a section on the IDB contributions to improve water management in the region, including pilot projects in Ecuador on adaptation of water utility reservoirs and storm drainage systems in Uruguay. Among others, the report also summarizes IDB actions on biodiversity, gender equity, and climate change, which saw 30 loans approved for $2.3 billion.

The report looks at where the IDB stands in achieving its own safeguards effectiveness targets, in terms of including advanced environmental and social safeguards in all its projects. Eighty-one percent of Bank projects with high environmental and social risks rated satisfactory in the implementation of mitigation measures, just 4 percent shy of the goal the IDB has set itself for 2015. By tracking safeguard performance, the IDB is able to better focus its attention on more complex projects in its portfolio.

Additionally, the IDB has made great progress toward attaining specific numerical targets, which are a reflection of the results of the projects it finances. For instance, thanks to IDB projects 1.6 million more people now have access to improved public low-carbon transportation systems, out of a 2015 target of 8.5 million. Almost 2.4 million farmers have access to agricultural services and investments (2015 target: 5 million). And five infrastructure loans included specific activities contributing to the improved management of conservation of protected areas.

Water resources management highlighted

The report includes a special section that underscores the complex relationships between water and human well-being, water and business productivity, water and energy production, water and food production, and the way climate change is impacting these relationships.

Latin America and the Caribbean hold 30 percent of the world´s fresh water resources, but many countries face challenges in better managing their water resources. Some links between water and development are obvious, such as the impact on health and poverty rates from the lack of drinking water and sanitation. Other links are less obvious. For instance, the Amazonian forests generate rainwater for the agricultural heartlands of Latin America.

The Report includes technical papers that examine water resources from four different perspectives:

  • water resource management in the Caribbean
  • climate change impacts on water in the tropical Andes
  • the relationship between hydroelectric development and waterways in Central America
  • and the effect of gold mining on waterways, with a particular emphasis on northern South America.

The Sustainability Report also includes commentaries by Costa Rica's Minister of the Environment René Castro, PepsiCo CEO Indra Nooyi, Princeton University Professor Ignacio Rodríguez Iturbe, and Santiago Levy, Vice President of Sectors and Knowledge of the IDB.

“Water resource management is emerging as a pivotal global challenge,” said Levy. “Decisions taken independently within the water, energy, and agriculture sectors may have far-reaching consequences for each of the other sectors as well as for ecosystem services.”