The Development Bank of Jamaica (DBJ) and International Finance Corporation (IFC) recently signed a memorandum of understanding (MOU) to collaborate on initiatives promoting blue green financing in Jamaica.

The partnership seeks to support sustainable finance solutions as it enhances capacity-building for the local financial sector. Its provisions are also ultimately aimed at accelerating private sector investment in climate resilience projects locally and across the wider Caribbean.

“The MOU underscores our commitment to driving sustainable growth and economic resilience in Jamaica by mobilising resources for critical climate projects. This partnership will help to ensure that local businesses and communities have access to the necessary funds and expertise to adapt to the realities of climate change,” DBJ’s acting Managing Director David Wan said.

The MOU, which follows DBJ’s recent accreditation by the Green Climate Fund (GCF), positions the bank as a leader in climate financing across the region.

In light of an International Monetary Fund (IMF) report which positions the Caribbean at the forefront of climate change impacts, owing to increased natural disaster risks, the collaboration between the two organisations is regarded as an important step towards bridging the financing gap in the Caribbean while addressing its urgent need for climate adaptation.

Based on the IMF report, the region’s adaptation investment needs are now estimated at approximately US$100 billion, which accounts for about one-third of its annual economic output.

“The Blue Green Financing Facility is poised to become a cornerstone of Jamaica’s strategy to build a resilient and inclusive economy and has the potential to serve as a model for other countries in the region,” stated Elizabeth Martinez de Marcano, regional director for Colombia, Mexico, Central America, and the Caribbean at the IFC.

A member of the World Bank Group, the IFC is the largest global development institution that works with financial institutions in emerging markets to deploy capital, mostly in the form of loans to businesses and other organisations, to implement climate-friendly projects. Having committed more than US$15 billion from its own funds to climate-related projects up to mid-2023, the entity said it remains committed to growing investments in the area to an annual average of 35 per cent of its own account by 2025. This, while it continues to work with financial institutions to finance projects that will support mitigation and adaptation.

In addition to its own commitment, the IFC has so far leveraged an additional US$5.8 billion with support from more than 210 emerging market financial institution partners.

Under the recent DBJ partnership, the IFC is to facilitate workshops and knowledge-sharing sessions aimed at sensitising stakeholders about the area while offering guidelines for blue-green finance eligibility and impact measurements.

“These activities aim to support the DBJ’s establishment of a blue-green finance investment facility during the 2024/2025 financial year,” a notice about the MOU indicated.