New resources for climate change mitigation and adaptation in the region

Manama, Kingdom of Bahrain, October 31, 2018.- The Board of Directors of the Green Climate Fund (GCF), in the framework of its twenty-first meeting, which took place on October 17 and 20, 2018, approved the first financing to the Central American Bank for Economic Integration (CABEI) in the amount of US$15.5 million to execute a productive climate change adaptation initiative.

Of these resources, US$12.5 million will be used to finance loans and US$3.0 million to finance technical assistance and facilitation of incentives for MSMEs and Financial Institutions of Guatemala, Nicaragua, El Salvador, Honduras, Costa Rica, Panama and the Dominican Republic to implement climate change adaptation actions.

CABEI Executive Vice President, Attorney Alejandro Rodríguez Zamora stated that the approval is aligned with the Bank's commitment to meet the needs and priorities of its member countries and comply with the guidelines established by the Board of Governors through CABEI's Declaration of Commitment to Promote and Support Financing for Climate Change Adaptation and Mitigation Actions.

The innovative and transformative aspect of this initiative includes the promotion of an integrative approach to guarantee resilience to climate change in the Bank's member countries. In this context, the Initiative will ensure a paradigm shift from individual sectoral decisions and actions to a coherent, coordinated and streamlined inter-institutional decision-making framework.

The Central American Commission for Environment and Development (CCAD) of the Central American Integration System (SICA), in which the Ministers of Environment and Energy participate, will provide strategic guidance on the environmental approach, as well as opportunities for synergy with other initiatives in the region.

An initiative aligned with resilience to climate change
The main objective of the Productive Investment Initiative for Climate Change Adaptation is to increase the resilience to climate change of at least 5,000 Micro, Small and Medium Enterprises (MSMEs) in the countries of the Central American region through access to financial and non-financial services that facilitate the adoption of climate change adaptation measures. The implementation of this program is expected to contribute to increasing the resilience of 67,000 inhabitants of the Bank's member countries.

To this end, CABEI will provide access to financing, technical assistance and incentives to MSMEs that implement climate change adaptation measures. The financing will be facilitated through CABEI's network of intermediary financial institutions.

The Initiative is formulated on the experience of the Central American Markets for Biodiversity Program in its first phase, which aimed to ensure that Central American MSMEs increase their contribution to sustainable development and environmental protection by incorporating interest in biodiversity in their products and services. The foregoing was achieved through access to financing, technical assistance, partial guarantees and Bio-award incentives.

Finally, CABEI's Vice President stated that today more than ever the Bank assumes great commitments and challenges to address the priorities and needs of its member countries, through the design and implementation of projects and programs that promote sustainable development and regional integration.

CABEI contributes to furthering public and private climate investment in the Central American region, especially in those countries most vulnerable to the adverse effects of climate change. During 2017, CABEI approved US$1.06 billion to finance programs and projects that implement climate change mitigation and adaptation actions. This amount represents 54.98% of total approvals made by the Bank, which demonstrates with concrete facts its commitment to support its member countries in their efforts to face the effects of climate change.

CABEI has cemented its role as a multilateral development organization and source of financing, in compliance with its commitment to support the region to face the effects of climate change. In addition, it has achieved its accreditation with different global entities in order to facilitate the flow of financing to the region and finance climate change adaptation and mitigation initiatives.