LAC Green Finance Facility - 16_I_246 - 9711 - Internationale Climate Initiative (IKI)

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LAC Green Finance Facility

As of: August 2019

Objective and activities

National Development Banks (NDBs) are in a unique position to engage local financial institutions and private investors, align development financing with national priority mitigation actions, and canalize international climate funding to promote scale up investments in energy efficiency (EE) and renewable energy (RE) projects. The program aims to empower NDBs to structure and coordinate innovative financing mechanisms for EE and RE in Latin America and the Caribbean, through: assessment of niche markets opportunities; development and combination of tailored risk sharing and financial and non-financial mechanisms to scale up investments in EE and RE; engagement of local financial institutions (LFI) in deployment of new financing products; identification and engagement of technology providers and key market stakeholders to structure demand for financing by bankable projects; and development of standards and mechanisms for monitoring and reporting and monetizing benefits from EE and RE.

State of implementation/results

  • The project supports National Development Banks (NDBs) in structuring green bonds. In October 2018, the Trust Funds for Rural Development (FIRA) in Mexico issued a green bond for USD 123 Mio.
  • In response to the demand of NDBs and other institutional stakeholders in the financial market, a web interface to share information and knowledge about green financing was launched.
  • In 2017, the Laboratory of Financial Innovation (LAB) was launched in Brazil. It connects more than 40 institutions representing market regulators, ministries of finance and planning, stock market, associations of investors, pension funds and insurers, as well as sectorial experts. The LAB fosters an intersectoral dialogue on green bonds, green finance and financial instruments for investments of social impact.
  • In Mexico, the Association of Banks of Mexico (ABM) and the Adisory Council on Climate Finance of the Mexican Stock Exchange (BMV) initiated the replication of such network, joining efforts to promote the Mexican Laboratory of Financial Innovation.
  • With project support, USD 23 million were raised from the Green Climate Fund for energy efficiency in small and medium enterprises in Paraguay for the Agencia Financiera de Desarrollo (AFD).
  • In Mexico, the state-owned NDB Banobras adopted a strategy to become a Green Bank participates in the Green Bank Network. Moreover, the project supported Sociedad Hipotecaria Federal (SHF) in implementing a tool for evaluation of impacts on climate change and sustainability of financed projects.
  • In Brazil, the provincial development bank of Sao Paulo, Desenvolve SP, developed guidelines and a detailed strategy for municipal level public-private partnerships for street lighting, waste management and distributed solar energy. A similar approach is being replicated with the provinicial development bank Fomento Parana.
  • The project contributed to the "Green Bank Design Summit" in March 2019, supporting NDBs in sharing experiences in structuring green finance products to achieve national climate policy goals.

Further Links:

Project data

Country:
Brazil, Colombia, Mexico, Paraguay, Uruguay

Implementing organisation:
Inter-American Development Bank (IADB / IDB / BID)

Partner institution(s):
  • Ministry of Environment and Sustainable Development (MADS) - Colombia, Secretariat of Finance and Public Credit (SHCP) - Mexico
  • Ministry of Environment and Sustainable Development (MADS) - Colombia,Secretariat of Finance and Public Credit (SHCP) - Mexico

BMU grant:
€ 5,000,000

Duration:
06/2016 till 03/2021

Website(s):



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