The Inter-American Development Bank (IDB) and IDB Invest, the IDB Group’s private-sector arm, provided more than $26 billion in climate financing for Latin America and the Caribbean between 2016 and 2021. This figure represents approximately 60% of all climate financing in the region from multilateral investment banks during this period.
Of the total, $8.3 billion went to climate adaptation and resilience, a priority in a region where the frequency of natural disasters has tripled over the last 50 years. IDB Invest’s contribution to adaptation has grown from $400,000 to $1.5 million in the last five years.
According to a recent IDB study, investing in long-term planning for adaptation can save lives and property both now and in the future, and prevent or reduce damages and losses caused by climate change. The IDB estimates that every dollar invested in resilient infrastructure can generate up to four dollars in economic benefits. Therefore, it is crucial for countries to include climate risks in their development planning and prioritize multi-sector actions to boost resilience.
The IDB estimates that every dollar invested in resilient infrastructure can generate up to four dollars in economic benefits
The level of climate finance provided in recent years reflects the region-wide commitment of the IDB Group – which consists of the IDB, IDB Invest and IDB Lab – and cements its place as a leading strategic partner in facing the climate emergency. The bank’s commitment is also on display at COP27, the United Nations climate summit in Sharm El-Sheikh, Egypt, where a senior IDB delegation is in attendance.
IDB Lab, the Bank’s innovation laboratory, is currently advancing innovative climate solutions for entrepreneurs. One of them is Regenérate, the first fund to develop an entrepreneurial ecosystem for creating and incubating bio-economy business opportunities in the Amazon region. The fund will bolster this ecosystem through debt financing, capital investments, grants and other financial instruments.
At COP27, the IDB delegation is holding bilateral meetings and advancing partnerships. The Bank announced the first regional program to promote electromobility based on green hydrogen in Latin America and the Caribbean. The program, backed by the IDB and the Green Climate Fund (GCF), will provide $450 million in concessional loans and grants to Barbados, Chile, Colombia, Costa Rica, the Dominican Republic, Jamaica, Panama, Paraguay, and Uruguay.
The first event organized by the IDB Group at COP 27, titled “Accelerating the Implementation of Climate Action in Latin America and the Caribbean,” highlighted the bank’s work to build synergies between the public and private sectors. Benigno López, vice president for sectors and knowledge, said, “Governments and businesses must come together to address the climate emergency. This is key to ensuring that the future is not lost.”
James Scriven, the CEO of IDB Invest, emphasized the private sector’s opportunity to play a decisive role in accelerating the green transition in the region: “There is a huge need for climate finance. We are working to help our clients close this gap and multiply the social and economic impact of their businesses.”
Several leaders from the region attended the event, including Gustavo Manrique, Ecuador’s minister of environment, water and the ecological transition; Azucena Arbeleche, Uruguay’s minister of economy and finance; and Franz Tattenbach, Costa Rica’s minister of environment and energy.