Cartagena, Colombia, Sep 6 (EFE).- The Inter-American Development Bank (IDB) on Wednesday secured three new partnerships with international organizations to boost green bonds in Latin America, the Caribbean, and other emerging markets.
These alliances, signed at the “Finance in Common Summit” (FiCS), the world’s largest development banking gathering this week in the Colombian port city of Cartagena, aim to heighten collaboration among institutions to help regional countries meet the UN’s Sustainable Development Goals (SDGs).
Germany’s KfW Development Bank signed a letter of intent with the IDB to establish the “Green Bond Partnership” (GBP). They plan to provide €2 million to the IDB to promote standards, best practices, and financial instruments to enhance the green bond markets in Latin America and the Caribbean.
This move will also bolster the IDB’s Green Bond Transparency Platform (GBTP).
Furthermore, the IDB and IDB Invest joined the “Global Green Bonds Initiative” along with six other development organizations, focusing on supporting the green bond markets in emerging and developing economies.
Also, in continued support of the GBTP’s expansion, the IDB and four other international development institutions released a joint statement expressing their backing for the platform’s adoption by countries outside Latin America and the Caribbean.
These organizations include the European Investment Bank (EIB), the French Development Agency (AFD), the KfW Development Bank, and the Spanish Agency for International Development Cooperation (AECID).
A CHALLENGING MARKET
Susana Cordeiro, the Manager of the Department of Institutions for Development at the IDB, appreciated the acceleration of the green bond markets over the “past two years,” but questioned why they haven’t grown more.
“They are not growing as exponentially as we would like, given the dialogue and interest in sustainability,” Cordeiro said.
She said she believed that one challenge emerging markets face is “how to approach it locally,” prompting the IDB to assess “how we conduct institutional strengthening.”
She emphasized the need for “struggle and effort,” noting, “If local agents are not involved in this model, then it will not progress.”
Meanwhile, Laura María Santa Zuluaga, an advisor to Colombia’s Financial Superintendence, pointed out that “developing countries are highly vulnerable to climate change and its direct impacts.”
To mitigate these impacts, a “staggering amount of money” is required that “the public sector cannot provide on its own,” she added.
“In implementing the taxonomy, we found that banks face challenges financing green projects due to insufficient information on their environmental performance,” Santa observed.
Therefore, she values the role of development banks, which have “genuinely” driven the green bond market. EFE.