CDB repurposes green financing to address regional COVID-19 funding deficitFriday, July 23, 2021
BY ANDREW LAIDLEY
When it comes to vaccination efforts, countries around the world are moving full speed ahead to inoculate their citizens against COVID-19. But, for developing countries in the Caribbean, the challenges are many.
At the centre of the Caribbean's problems is finding money to procure vaccines and launch public sensitisation campaigns targeted at increasing vaccine take-up. But those aren't the only obstacles. Other challenges being experienced by the Caribbean include procuring personal protective equipment for health-care workers and ventilators for those who become critically ill. These issues require significant expenditure which can, in some cases, plunge already staggering economies deeper into debt.
That's why the Caribbean Development Bank (CDB) and the European Investment Bank (EIB) are partnering to ease the financial burden on Caribbean countries. The two enties have agreed to redirect funds geared towards strengthening the region's climate resilience to financing the COVID-19 funding gap.
“This is not, in a sense, new money. It is money that was already part of a previously signed agreement of 120 million euros. What we are doing is repurposing 30 million of those specifically to meet the COVID-related additional expenditures,” said Dr Gene Leon, President of the CDB.
The money was given to the region as a grant from the EIB and will be available to all borrowing member countries (BMCs). “Speed is of the essence, we would like to be able to deploy as quickly as we can and, in fact, we have a target of deploying those funds before the end of this year,” said Leon.
Director of Projects at the CDB, Daniel Best, explained that the funds will go to countries where there is a clear need for it, but he noted that there are no specific criteria for accessing the funds. “There is no cap on what each borrowing member country can access, it's essentially gonna be on a first come, first served basis as we develop these interventions.”
At the same time, Vice-President of the EIB Ricardo Mourinho Félix said the remaining funds will stay available for its regional purpose which is green financing. He said, “If it proves that additional funds are needed, then the EIB will be here to discuss an additional repurposing in case it is needed.” But that will depend on the demand for the current funds which are available.
In the meantime, Félix stressed that while the effects of the novel coronavirus pandemic are evident, the long-standing climate change challenges are still a deterrent to regional development.
“Considering the challenges posed by climate change, we need to do more and we need to do it faster. We need additional initiatives and projects in order to address the investment gap that the Caribbean region is facing. Public funding and traditional instruments, such as grants, will not be able to solve all the challenges that the region faces,” said Félix.
He noted that the CDB was one of the first international financial institutions to fully integrate climate vulnerability risk assessments into its project appraisal process, which he claims “is not a small thing”. He said the European Union will work with guaranteed support private sector lending in the future and will gladly offer to share this experience whenever it may be useful.
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