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IDB Safeguards help promote sustainable growth, study finds

A study led by Professor Andreas Georgoulias,Research Director of the Zofnass Program at Harvard University, found that implementing environmental and social safeguards helps make Inter-American Development Bank projects more sustainable, improved local regulatory frameworks and helped sponsors implement innovative best practices.

The study looked at nine IDB projects in eight countries, in sectors such as Energy, Transportation, Urban Development and Housing.

The Inter-American Development Bank (IDB) partnered with Prof. Georgoulias and Researcher Maria Ignacia Arrasate to investigate the benefits, outcomes, and effectiveness of IDB’s environmental and social safeguard policies.

“All too often, governments and, frankly, even some of our own project leaders, find safeguards cumbersome and even bureaucratic,” said Janine Ferretti, Chief of IDB’s Environmental Safeguard Unit. “These analyses have the potential to fundamentally influence the way the IDB approaches infrastructure projects, moving from a model which reacts to negative environmental and social impacts to one which sees sustainability as a way to deliver multiple benefits, enhancing the impact of development projects.”

Latin America and the Caribbean (LAC) face urgent needs to increase infrastructure investment. Up to 5% of GDP (US$250 billion) is required annually to close the infrastructure gap. On the other hand, infrastructure projects may also cause negative impacts on quality of life and environment.

In recent years, there has been increasing demand for better understanding of the benefits of environmental and social safeguard policies and, particularly, the environmental and social outcomes that result from implementing safeguard policies. Harvard’s Envision Rating System for Sustainable Infrastructure offers a useful analysis for measuring the extent to which environmental and social safeguard policies deliver sustainability benefits.

As part of the study, Dr. Georgoulias applied the Envision assessment methodology to review nine IDB-funded projects. The findings revealed several benefits of IDB safeguards, including:

  • Safeguard policies are instrumental in facilitating sustainability in IDB projects.
  • Sustainability performance is higher in projects where IDB was involved earlier in the project cycle.
  • Safeguards enhanced national regulations and the institutional capacities of borrower members to manage environmental and social impacts, and helped sponsors implement innovative best practices.

The Costa Rica International Airport Expansion was one of the projects selected for analysis. This project includes the completion of a new terminal building at the airport and the rehabilitation of other related infrastructures. Major concerns included the proper handling of materials, debris and waste, generation of dust and noise, and air pollution. In relation with the nearby community, poor water management caused flooding problems.

As part of the loan agreement, a new department of Environment and Sustainability was created to monitor soil and air pollution, control spills, and provide training on environmental issues. The department also implemented small sustainability initiatives, such as water-efficient sanitary installations and energy-efficient lighting, while it resolved the process of relocating polluting facilities and cleaning contaminated land. Studies to address impacts on bird populations, water pollution, and noise pollution were also included in accordance with IDB’s standards.

The project achieved high Envision scores, particularly in Leadership and Natural World categories, reflecting its contribution to strengthening management capacities as well as improving water functions and preventing water contamination.

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. The IDB is the leading source of multilateral financing for Latin America and the Caribbean.