Latin America and the Caribbean Facility for Greening Public Development Banks and the Financial Sector

To date, only a few Public development banks (PDBs) in Latin America and the Caribbean are committed to net-zero strategies to deliver direct results over the Paris Agreement goals. Therefore, the Facility provides technical assistance and performance-based incentives to PDBs committed raising their ambition toward Paris Agreement alignment. It also seeks to enhance the banks’ lending capacity and mobilize private sector climate investments. Under the IDB’s Advisory Program, PDBs may benefit from, inter alia, the development and implementation of a sustainability strategy, socio-environmental and climate-related risk management systems and tools like climate tagging of PDB’s portfolios. Performance-based payment mechanisms will be designed and implemented to incentivize the achievement of PDB’s institutional milestones across competencies like sustainable finance strategy, portfolio management, risk management, and metrics and disclosure.