IDB, IDB Invest and UK Expand Collaboration to Boost Climate Action in Latin America and the Caribbean
(From left to right) President of the IDB, Ilan Goldfajn; UK Minister of State for International Development, Andrew Mitchel and CEO of IDB Invest, James Scriven, during signing of agreement.
- IDB Group and the UK expand the scope of UK innovative Sustainable Infrastructure Program (UKSIP) to target climate adaptation and resilience, and nature-based solutions, as well as reducing emissions.
- The program will include the Caribbean Basin and Central America, and continue collaborations with existing partner countries Brazil, Colombia, Mexico, and Peru.
DUBAI – Today at the 2023 United Nations Climate Change Conference (COP28), the Inter-American Development Bank Group (IDB Group) and the Government of the United Kingdom agreed to extend their collaboration through a new phase of the UK Sustainable Infrastructure Program (UKSIP).
The new phase recognizes the climate financing needs across Latin America and the Caribbean: to reduce emissions, adapt to climate change, ensure infrastructure and communities are resilient to its effects, and invest in cost effective nature-based solutions. The program will bring adaptation and resilience and nature into scope. This responds to commitments made by stakeholders at COP26 hosted by the UK, to double climate financing for adaptation – which the UK has committed to build on by tripling its financing for adaptation by 2025 - as well as pledges made during the Kunming-Montreal Convention on Biological Diversity last year to mobilize finance for nature.
The new phase brings into scope small and island countries in the Caribbean basin and Central America, and continues collaboration with existing partner countries Brazil, Colombia, Mexico, and Peru.
The program provides public and private sector technical cooperation support to develop policies, market infrastructure, and investable projects that can be replicated and scaled. Additionally, it provides concessional resources for blended finance including debt, equity, guarantees, and performance-based incentives, to support and shape sustainable infrastructure projects and mobilize private investment in climate action.
In 2017 the UK Government launched UKSIP with the IDB Group, to support countries to attract private investment in sustainable infrastructure. Doing so helps countries to reduce emissions, by developing renewable energy, clean transport, and water and sanitation infrastructure, all of which support progress towards the Sustainable Development Goals (SDGs).
The UK has invested over US$80 million through UKSIP, supporting over US$7.2 billion of financing for climate action. IDB Invest has blended this UK investment with IDB and private capital to finance first-of-a-kind projects with innovative business models, mobilize new investors, and prove novel climate investments can generate financial returns. For example, in Bogotá, Colombia the program supported the purchase of 400 electric buses under an innovative procurement model and attracted private sector investment to this new asset class, accelerating the adoption of electromobility in public transport in Latin American and the Caribbean. Altogether these investments are projected to reduce or avoid 18.8 million tons of greenhouse gas emissions (MtCO2e) over the life of the assets.
Through technical assistance the program has established and reinforced institutional and regulatory frameworks in energy, transport, water and sanitation, and financial markets. And it has supported private sector projects to attract finance. For example, the program provided technical assistance funding to support the design of the long-term energy auctions for renewable energy in Colombia, and subsequently participated in a long-term local currency financing package, including private capital, for the development of two of the early solar projects awarded contracts in the auction program.
By investing in adaptation and resilience, and nature-based solutions as well as reducing emissions, and extending support across the Caribbean Basin, the partnership between the IDB Group and the UK aims to contribute to a resilient and sustainable future for communities across the region.
Ilan Goldfajn, President of the IDB, said: “The success of UKSIP is a testament to the power of partnerships. Over the past five years, our joint efforts with the UK government have helped attract private investments in sustainable projects that were aligned with the national government objectives of Brazil, Colombia, Mexico, and Peru. Our aim is to extend these initiatives to the Caribbean and Central America, where the impact of climate change is particularly pronounced.”
James Scriven, CEO of IDB Invest said, "We are excited to build on the success of the UKSIP in blending UK investment into first-of-a-kind climate projects. IDB Invest continues to be a leader in climate change, including Paris Alignment of all our new investments, and we are increasingly integrating climate adaptation and nature into our investments. Expanding the scope of this partnership with the United Kingdom strengthens our ability to support, invest in, and mobilize resources for innovative private sector-led climate adaptation and nature-based solutions, especially in small and island economies."
UK Minister of State for International Development, Andrew Mitchell said “To end extreme poverty and tackle climate change and biodiversity loss, we must mobilise international finance and increase private sector investment in development. To support Latin America and the Caribbean with this, I am delighted to extend the UK’s collaboration with IDB.”
Latin America and the Caribbean at COP28
The countries of Latin America and the Caribbean are a critical part of the solution to global climate change challenges. In the IDB Pavilion of the Americas, the Bank is hosting more than 30 events with international leaders and experts to showcase initiatives on climate action, from cutting-edge financial instruments to the conservation and sustainable use of natural resources, the Amazon, a just economic transition, and more. Journalists covering COP28 on site are welcome to visit the pavilion, with no registration required. Consult the event schedule here. For journalists covering COP28 remotely, register to access broadcasts of selected events.
Location: IDB Pavilion of the Americas at Blue Zone Pavilion, Opportunity District (OA04G2).
About the IDB Group
The IDB Group is the leading source of development financing for Latin America and the Caribbean. We contribute to improving lives by providing financial solutions and development expertise to public- and private-sector clients. The Group comprises the IDB, which has worked with governments for more than 60 years; IDB Invest, which serves the private sector; and IDB Lab, which tests innovative ways to enable more inclusive growth. Take our virtual tour.
The Foreign Commonwealth and Development Office is the UK government ministry responsible for international development. Read more about the UK’s plan to accelerate progress to eliminate extreme poverty, and address climate change and biodiversity loss here.