CABEI approves Central American Dry Corridor Program for the benefit of 2.4 million people and the Dominican Republic
The initiative includes several actions that will contribute to the resilience of the 20,530 km² area and its climate change mitigation.
Antigua Guatemala, March 29, 2022.- With the objective of improving the capacity to adapt to the adverse effects of climate change in the countries of the region, the Central American Bank for Economic Integration (CABEI) approved the Central American Dry Corridor Program and the Arid Zones of the Dominican Republic for US$217.1 million, of which the Green Climate Fund (GCF) will contribute US$174.3 million, the Bank US$42.8 million, and the countries receiving the funds will contribute US$51.3 million.
Of the total amount of the Program, US$84.3 million will be non-reimbursable funds to implement Ecosystem-based Adaptation (EbA) measures and technical assistance; US$102.8 million will be reimbursable resources channeled through CABEI intermediary financial institutions; and US$30.0 million will be for a partial guarantee fund to support loans channeled through financial institutions.
The mix of resources resulting from the mobilization that CABEI has achieved through the participation of the GCF in this program will allow financial institutions to access reimbursable resources for investment in EbA at a fixed annual interest rate of 1.90%.
The Program, which is expected to benefit more than 1,084,441 people directly and more than 1,364,044 people indirectly in Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama and the Dominican Republic, is a regional initiative that will facilitate a change in the approach to water management by accelerating the adoption of Ecosystem-based Adaptation (EbA) and other measures that will increase resilience to extreme climate events, such as severe drought and extreme precipitation.
"With the approval of this important program, which has historically been the most competitive for CABEI in attracting resources from the private sector, we reaffirm our commitment at the highest level to promote initiatives and strategic alliances that support environmental sustainability through innovative financial mechanisms aimed at mitigating and adapting to climate change in a region that is highly vulnerable to climate phenomena," highlighted CABEI Executive President, Dr. Dante Mossi.
In addition, it is expected to benefit an area of approximately 20,530 km², reduce deforestation in the areas prioritized in the Program, provide access to financial services such as credit, partial credit guarantees and non-financial services through technical assistance in order to improve the quality of life of small and medium-sized producers in the region's Dry Corridor, among others.
Through this operation, CABEI continues to consolidate its position as the leading financial institution in Central America in mobilizing GCF resources that contribute to climate change mitigation and adaptation. To date, CABEI has approved US$525.2 million for the execution of four investment initiatives and US$2.0 million for technical assistance operations in the region.
