THE multiplicity of challenges that have disrupted economic activity in the Caribbean over the last decade has brought into sharp focus the need for collaboration between the Caribbean Development Bank (CDB) and its multilateral partners to invest in infrastructural and institutional resilience across the region.

Against a backdrop of climate change and environmental degradation; health concerns including the novel coronavirus pandemic; and the current war between Russia and Ukraine that has created global inflationary pressures, president of the European Investment Bank (EIB) Dr Werner Hoyer argues that “we are in a multi-crisis world” that will require investment in economies and societies to change the way countries respond to these challenges.

Speaking during a CDB-hosted panel discussion last week, under the theme ‘Innovative Financing for Sustainable Development: What Can MDBs Do?’, Dr Hoyer said the EIB is committed to working with the CDB to find and create investment solutions for the crises that lie ahead for the region.

“We (EIB and CDB) show that partnerships are key to master multiple crises,” he stated, adding: “CDB has an unparalleled expertise when it comes to tackling development challenges in the region, but together we can achieve much more.”

According to Dr Hoyer, both regional banks have enjoyed a relationship that goes back to the late 1970s. Since 2011, however, a key focus of the relationship between the CDB and EIB has been on climate action, with the latter providing concessional financing and technical assistance to support climate adaptation and mitigation across the region.

In this regard, the EIB president noted that it was incumbent on both institutions to act quickly and to ensure investment of a sustained period of between 10 and 15 years.

“There is no time to waste when it comes to the climate, and if we wait too long we will be confronted with the necessity to engage in abrupt transitions with the vulnerable most [affected],” he urged.

Dr Hoyer added that the impact the Ukraine war has had on agricultural markets globally, as well as that of COVID-19 on health systems, has exacerbated the regions exposure to global shocks.

As such, both the EIB and CDB have collaborated on introducing sustainability bonds and discussed ways in which to increase opportunities for private sector participation.

“We recognise that beyond our cooperation with multilateral institutions, the provision of grants and loans are not enough. New financial instruments will need to be deployed to bring private capital to also fund climate action,” Dr Hoyer said.

“There is enormous potential for guarantees and other risk-sharing instruments so that more capital can be mobilised,” he further explained.

In fact, based on his interactions, Dr Hoyer said he has detected interest among European investors and asset managers who are searching for development financing opportunities.

“So I think the money is waiting on the streets to be picked up by us to catalyse it into productive investments and we share the CDB’s vision for a transformational approach to investing in the region,” the EIB head shared.

Another way in which the EIB will provide assistance to its Caribbean counterpart is leveraging its relationships with other multilateral development banks (MDBs). Along with other MDBs, the European Bank has been working on “climate-informed development strategies” aimed at lowering greenhouse emissions.

For the current year, the EIB is chairing a collective of MDBs and Dr Hoyer pointed out that it was in this context that he wanted to further collaborate with the CDB.

“It is particularly important to leverage these synergies as MDBs have a role to play and we look forward to play that role with the CDB,” he concluded.