IDB Invest and Finland Launch Blended Finance Climate Fund in Latin America and the Caribbean
IDB Invest, a member of the Inter-American Development Bank Group, and Finland announce the establishment of the Finland-Latin America and the Caribbean Blended Finance Climate Fund. This single-donor trust fund will receive a contribution of 50 million euros from Finland. The Fund will finance private sector climate mitigation and adaptation projects in Latin America and Caribbean.
The region is facing adverse effects of climate change, which often impact women and people in vulnerable situations more severely. Finland is committed to curb climate change and boost climate resilience, while fostering equality and inclusion beyond its borders. The Fund will provide concessional financing to climate finance projects with a cross-sectoral focus on the poorest and most vulnerable countries and communities, gender equality, diversity, inclusion and biodiversity.
Finnish Minister for Development Cooperation and Foreign Trade Ville Skinnari, on behalf of the Government of Finland, signed a contribution of 50 million euros to the Fund. It will invest in climate mitigation activities that reduce greenhouse gas emissions and increase the capacity of carbon sinks, and in climate adaptation activities to support sustainable business models and vulnerable communities across the region.
IDB Invest will originate, execute and manage the Fund’s blended finance resources using various investment instruments, including debt instruments, guarantees and equity investments, as well as performance-based incentives.
“As we look forward to strengthening the IDB Group’s leadership in climate action, I am glad to start my tenure on the right foot. Signing this agreement with Finland will help the region mitigate and adapt to climate change by using innovative financial instruments and catalyzing private sector investments,” said Ilan Goldfajn, IDB President.
“Finland has been a key partner in our efforts to lead by example on climate change action as demonstrated by their recent entry to our NDC Pipeline Accelerator Multi-Donor Trust Fund. Today, we are expanding our partnership by establishing this blended finance Fund to address climate change in collaboration with the private sector and create meaningful opportunities for women and vulnerable communities across Latin America and the Caribbean,” said James P. Scriven, IDB Invest’s Chief Executive Officer.
”Many countries in Latin America and the Caribbean need innovative ways to attract private investments for ambitious climate activities. Finland wants to collaborate and offer our expertise with partners in the region for effective climate action,” said Minister Ville Skinnari.
The Fund's purpose is aligned with the IDB Group Climate Change Action Plan, which emphasizes the essential role that partner resources play in promoting sustainable development, and with the institution's commitment to the 2030 Agenda in Latin America and the Caribbean. Moreover, the Fund will also be aligned with other donor trust funds administered by the IDB Group with a mandate to invest in projects that contribute to climate change mitigation and adaptation through private-sector financing.
About the IDB
The Inter-American Development Bank (IDB) is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social, and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance, and training to the public- and private-sector clients throughout the region.
About IDB Invest
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social and environmental development in the region. With a portfolio of $15.3 billion in asset management and 375 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
About Ministry for Foreign Affairs of Finland
Finland is committed to one of the most ambitious climate targets in the world by aiming to achieve carbon neutrality by 2035. Finland is also committed to scaling up its international climate finance as a part of its development finance, taking due account of its contribution based on the Paris Agreement. In addition, Finland aims at directing half of its international climate finance to climate change adaptation. Therefore, also this Fund includes a target of allocating 20% of financing to adaptation.
The Ministry for Foreign Affairs of Finland promotes the security and welfare of Finland and the Finns, and works for a secure and fair world. Development policy is an important part of Finland’s foreign and security policy and development cooperation is one means to implement the policy. Finland joined the IDB in 1977. Since then, Finland has financed several IDB initiatives, and has been a strong supporter of efforts to reduce poverty and inequality, and has contributed to countries in the region hit by natural disasters.