International. The Inter-American Development Bank (IDB) approved financing for the establishment of a Regional Facility for Green Energy Efficiency Bonds. The program will receive up to US$217 million in additional funding as one of eight projects selected worldwide in the first resource allocation cycle announced by the Green Climate Fund on November 6.
"This private sector program stands out for its innovative financial structure, which encompasses small and medium-sized enterprises and the potential mobilization, through capital markets, of funds from different institutional investors, such as pension funds and insurance companies," said Gema Sacristan, Chief of the IDB's Financial Markets Division.
The program will provide an alternative mechanism for financing energy efficiency through the issuance of bonds backed by green assets and will also contribute to the development of the region's capital markets. The programme will offer these securities in accordance with the standards set out in the Green Bond Principles and encourage socially and environmentally responsible investments.
The approval of this program reinforces our commitment to support the efforts of Latin American and Caribbean countries to implement their proposals for Intended and Nationally Determined Contributions, said Amal-Lee Amin, Chief of the IDB's Climate Change and Sustainability Division. "Access to capital markets for the refinancing of energy efficiency is key to increasing the volume of decarbonization investments in the medium and long term."
Mexico will be the first country to implement this program, followed by the Dominican Republic, Jamaica and Colombia. The IDB loan, of up to $400 million, will be complemented by financing of up to $50 million from the Chinese Co-financing Fund, administered by the IDB, in connection with the first use of the facility in Mexico. by 2018, through its investments from the public and private sectors.
