Innovative financing solution aimed at climate change adaptation

06/02/2019

The CABEI program will benefit 5,000 MSMEs in the Central American region, benefiting more than 67,000 people with increased climate change resilience.

Tegucigalpa, February 06, 2019.- The Board of Directors of the Central American Bank for Economic Integration (CABEI) approved the "Initiative for Productive Investments Adaptating to Climate Change (CAMBio II), which aims to increase the resilience to climate change of Micro, Small and Medium Enterprises (MSMEs) in Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama and the Dominican Republic by menas of access to financial and non-financial resources in order to adopt and apply the best climate change adaptation measures.

This program is significant  since it is the first financing of the Green Climate Fund (GCF) through CABEI, subsequent to its accreditation in December 2016. The program will be developed in five years and will have an availability of US$28 million with a financial contribution from CABEI for an amount of up to US$12,500,000 as a counterpart for the implementation of the CAMBio II Program. The resources, which were approved on October 2018 by the GCF amount to US$15,500,000, of which US$12,500,000 will be reimbursable and used to finance loans, and US$3.0 million will be used for financing technical assistance and facilitation of incentives for MSMEs and financial institutions.

A streamlined and synergetic program

The implementation of CAMBio II will lead to the emergence of new sustainable production and consumption models, which will generate  social and environmental benefits in the region and favor the creation of new jobs.

The program will be implemented through the following components:

  • Innovative financial mechanism for adaptation measures based on ecosystems.
  • Creation of capacities for the development of production models resistant to climate change.
  • Inventive scheme to promote adaptation measures implemented by MSMEs (Bio Award).

The execution of this initiative will benefit at least 5,000 MSMEs through access to financial and non-financial services that will facilitate the adoption of measures to adapt to climate change and help increase the resilience of 67,000 inhabitants of the Bank's member countries.

According to the CABEI Executive Vice President, Attorney Alejandro Rodríguez, "The Bank raises the need to promote and implement initiatives that foster the sustainable management of the region's natural resources."

Likewise he explained that, "It seeks to ensure that institutional efforts in development, competitiveness and integration have long-term environmental viability and special emphasis on generating initiatives that reduce vulnerability linked to climate change."

In addition, he highlighted that the program will provide concessional financial resources in order to promote access to credit and offer better conditions to the final beneficiaries. Furthermore, it will provide technical assistance resources to contribute to the development of capacities, as well as to guarantee that quality studies be carried out to enable an adequate project analysis and a complete evaluation of the identification and mitigation of risks.

CABEI reiterates its commitment to continue working towards the construction of a multilateral bank willing to be at the forefront of new developments regarding the challenges of a changing environment and that this region demands, in order to face future challenges and guarantee a service in line with its member countries.

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