CAF will Allocate USD 25 Billion to Boost Green Growth in the Next Five Years
The multilateral organization launched a green strategy that promotes climate action, biodiversity conservation, energy transition and nature-based solutions. In the next five years, it will mobilize its own financial resources and align the interests of public and private actors around the reduction of greenhouse gas emissions. The institution's green financing will go from 24% in 2020 to 40% in 2026.
During the COP26 in Glasgow, CAF -Development Bank of Latin America- announced its commitment to allocate USD 25 billion over the next five years for green operations that help the countries of the region to increase climate resilience, promote the energy transition, achieve the reduction of greenhouse gas emissions and strengthen the conservation of biodiversity natural ecosystems and.
The institution also plans to strengthen the mobilization of third-party resources, such as the issuance of green bonds and green and climate funds, and will promote strategic alliances to align the work of governments, civil society, international organizations, NGOs and the private sector. This will help conserve biodiversity, design public policies for adaptation and mitigation, strengthen government capacities, and encourage inclusive and environmentally friendly economic growth.
“The planet needs the leadership of Latin America to guarantee its own survival, and the region must take advantage of its position to achieve sustained economic growth to overcome structural gaps in poverty, productivity and inclusion. To face climate change, it is essential that we adopt new financial instruments that guarantee current financing and attract new investments from the private sector,” said Sergio Díaz-Granados, CAF's Executive President.
One of the first actions related to CAF's new green strategy is the contribution of USD 1 million to reinforce the agreement between Colombia, Costa Rica, Ecuador and Panama to conserve the Marine Corridor of the Eastern Tropical Pacific, an ecosystem that generates USD 3 billion million annually derived mainly from fishing, tourism and maritime transport.
In addition, CAF will build a platform to mobilize climate and environmental funds that in the 2021-2026 period will make it possible to mobilize at least USD 1.5 billion in concessional financing to the region, and, in parallel, will create a HUB for the Caribbean in Trinidad and Tobago, which will give special emphasis to environmental issues and prevention of natural disasters in the region.
CAF plays a leadership role in the IDFC (International Development Finance Club), an organization that has 26 members who work together to fulfill the Sustainable Development Goals SDG and the commitments of the Paris Climate Agreement, joining forces to promote and take advantage of Investing in Sustainable Development around the world. It is also accredited to the main green funds for global financing, such as the Adaptation Fund, the Global Environment Facility (GEF) and the Green Climate Fund (GCF), thus supporting its member countries in the implementation of projects that contribute to the fulfillment of its environmental and climate commitments.
Strategic lines of the green bank of Latin America
CAF is committed to becoming the green bank in Latin America, through a series of strategic lines, which are summarized in the following points:
- Portfolio of green operations that include interventions in natural capital and mitigation and adaptation measures to climate change. This implies credit lines granted to the intermediary financial institutions with which CAF works in its shareholder countries.
- Strategic alliances with investors and international allies, such as specialized funds, banks and the private sector to attract and mobilize new resources.
- New financial instruments that allow optimizing the use of capital.
- New alliances with universities, foundations, NGOs, subnational governments to exchange knowledge and best practices.
- Creation of a regional platform to face the climate crisis and the loss of biodiversity.
- Coordination with local actors as the basis for climate action.
- Green financing in capital markets under the framework of CAF's Green Bonds Program.
- Transition of the business fabric towards sustainable and resilient production models that comply with the commitments to reduce greenhouse gases and enhance productivity, innovation and digitization. sustainability benefits.
- Support in the formation of a regional carbon market, which channels international resources in favor of the productive, sustainable and resilient transformation of Latin America and the Caribbean.
CAF's more recent content
CAF, ECLAC, IDB and PAHO Promote Sustainable Development in the G20
The Regional Organizations of the Americas congratulate Brazil on its successful G20 Presidency, highlighting its leadership on key issues such as poverty, governance, and climate change. They also reaffirm their commitment to actions that promote equity and development in the region.
Urgent Call for Action to Safeguard Caribbean SIDS at CAF Symposium
As the global community grapples with the escalating climate crisis, Caribbean Small Island Developing States (SIDS) are running out of time to secure critical investments and support needed to strengthen their economies and protect vulnerable communities from the intensifying impacts of climate change. With the window to take decisive action rapidly shrinking, CAF - Development Bank of Latin America and the Caribbean, in partnership with the Commonwealth Secretariat and the Antigua and Barbuda High Commission, brought together key stakeholders for a symposium in London to address the critical vulnerabilities Caribbean SIDS face.