New agreement to accelerate financing for climate projects in the Caribbean
Jamaica
The European Investment Bank (EIB) and the Inter-American Development Bank (IDB) have signed a new agreement enabling them to better support climate resilient projects throughout Latin America and the Caribbean.
They said the Mutual Reliance Agreement will improve project implementation and monitoring, empowering the EIB and the IDB to finance climate-focused investment more efficiently.
The initiative enhances efforts by both banks to harmonise their work on projects and make development resources more effective.
Specifically, the new agreement allows the EIB and the IDB to delegate to each other procurement tasks related to project preparation, implementation, and monitoring. That will improve joint financing arrangements, increase efficiency, and reduce transactional costs for partners in the region.
In practical terms, for each new project that is co-financed, partners will now be able to designate a lead co-financier whose procurement policies will govern the project, with the other co-financier relying on the lead’s work.
The agreement also bolsters the banks’ commitment to streamlining procurement activities for promoters and recipients and enables multilateral development banks (MDBs) to monitor procurement activities more efficiently.
The agreement was signed during a bilateral meeting between EIB President, Werner Hoyer, and IDB President Mauricio Claver-Carone, on the margins of the Spring Meetings of the World Bank Group and the International Monetary Fund here.
It will increase the coherence of co-financed operations and improve the ability of both institutions to identify development priorities and determine in which countries these operations can have the greatest development impact.
“Latin America and the Caribbean have all the right conditions to become a global renewable energy hub. Today, we are marking an important step to unlock investment opportunities in partnership with IDB, focusing on increasing the impact of our joint support for growth, innovation, climate action and resilience,” said Hoyer.
“At the Inter-American Development Bank, over the past two years we have strived to expand our support to the region and improve the way we respond to the needs of our member countries. As a result, we’ve reached unprecedented financing levels.
“ It is critical that we continue to improve how we work with partners to maximise synergies, facilitate co-financing, and streamline processes to ensure our work is as efficient, effective and approachable as possible. This new agreement with the European Investment Bank achieves this very goal, optimising the process for joint financing and enabling our organisations to double down on our work together,” said Claver-Carone.
The EIB-IDB partnership supports projects that promote climate action and attract private investment in Latin America and the Caribbean. The banks co-finance projects across the region, and are also building on their ongoing work to co-finance projects by funding additional sovereign guaranteed operations.
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