WASHINGTON, United States (CMC) — Jamaica is the only Caribbean Community (CARICOM) country that will benefit from an Inter-American Development Bank (IDB) multimillion-dollar-funded regional Energy Efficiency Green Bond Facility.

The IDB said that it has approved financing to establish the facility and that the programme was selected to receive up to US$217 million in additional funding as one of eight projects worldwide in the first round of allocations announced by the Green Climate Fund (GCF) earlier this month.

“This private sector programme stands out for its innovative financial approach, involving small and medium enterprises and the potential mobilisation through capital markets of funds from different institutional investors such as pension funds and insurance companies,” said Gema Sacristan, IDB’s Financial Markets Division Chief.

Providing an alternative financing mechanism for energy efficiency projects through the issuance of green asset-backed securities (ABS), the programme will also contribute to the development of capital markets in the region.

The programme will introduce green ABS following the Green Bond Principles standards and will foster socially and environmentally responsible investments.

“The approval of this programme furthers our commitment to supporting Latin American and Caribbean countries in the implementation of their proposed Intended Nationally Determined Contributions (INDCs),” said Amal-Lee Amin, IDB’s Climate Change and Sustainability Division Chief.

“Tapping into domestic capital markets for refinancing of energy efficiency is key for increasing the scale of investment for de-carbonisation over the medium and longer-term.”

IDB said that Mexico will be the first country to implement this programme, followed by the Dominican Republic, Jamaica, and Colombia.

The IDB’s loan of up to US$400 million will be complemented by a loan of up to US$50 million from the China Co-Financing Fund, administered by the IDB, in connection with the first utilisation of the facility in Mexico.