OREANDA-NEWS. The Boards of Governors of the Inter-American Development Bank (IDB) and Inter-American Investment Corporation (IIC) – together, the IDB Group – endorsed the objective of increasing the volume of climate-related financing to 30 percent of the IDB’s and IIC’s combined operational approvals by the end of 2020. Climate investment needs in Latin American and Caribbean region have been estimated at $75 to $80 billion per year between 2020-2030, representing close to 1.5 percent of the region’s GDP and almost three times its current volume of such investment.

Reducing the gap will take on increased significance in light of the ambitious goals of reducing emissions and building resilience within the country commitments (”intended nationally determined contributions,” INDCs) submitted in connection with the UN COP21 Paris Climate Conference held in December 2015.

"With the Paris Climate Conference and the Sustainable Development Goals, we now have the technical and political underpinnings for a new sustainable development paradigm,” said IDB President Luis Alberto Moreno. “In the Bank and the Inter-American Investment Corporation we are joining this effort, convinced of the importance of ensuring that countries are called upon to define and guide the implementation of this agenda.”

The IDB Group prioritizes assistance to countries for the implementation of those commitments, translating them into investments plans and projects, for example making infrastructure low-carbon and resilient to climate change.

As part of its strengthened commitment to climate finance, the IDB will increase the use of innovative instruments for leveraging private sector finance for mainstreaming adaptation and climate resilience, such as green bonds, in addition to financial products including loans, technical cooperation grants, guarantees and equity investments.

As a complement to the Governors? endorsement of the financing goal, the Bank announced the creation of a new Climate Change and Sustainability Department, which will be responsible for the IDB?s work on cities, rural development, tourism, environment and natural disasters, in addition to coordinating climate change and sustainability actions for the IDB.

The Bank and Corporation also indicated that by 2018 proposed investments will undergo a climate-risk screening process to identify opportunities to include climate-resilient design elements. The screening process will also serve as means to identify and thus increase adaptation investments at an earlier stage in the project cycle.

The lending target is subject to demand from borrowing countries and clients and access to external sources of concessional financing. The Governors? endorsement took place during the IDB Group?s Annual Meeting in Nassau, The Bahamas.

About the IDB

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source oflong-term financing for economic, social and institutional development in Latin America and the Caribbean.The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the re