Please support the Ministry’s public relations work: We need your consent to be able to measure your user activity on our website using etracker. A pseudonymised evaluation of this data by etracker helps us to improve our website. You can revoke your consent at any time for the future. Once you have made your selection, the consent management screen will appear at the bottom of the page. You can use this to stop or to reactivate the statistical evaluation at any point. You can reactivate tracking by dragging the slider in the opposite direction.
This website sets temporary session cookies. These are strictly necessary and therefore cannot be deselected. Their sole purpose is to enable you to use the website.
The Ministry also presents its work on this website in the form of videos. These are made available by the provider TV1 using JW Player. Please consent to the transmission of your IP address and other technical data to JW Player and allow JW Player to set cookies on your end device if you wish to view videos on our website. We also provide a consent management function for this at the bottom of the page. You can use this to control whether JW Player is enabled or not.
You can find detailed information on your rights and how we protect your privacy in our privacy policy.
Consent to the use of JW Player for video streaming
The Ministry also presents its work on this website in the form of videos. These are made available by the provider TV1 using JW Player. Please consent to the transmission of your IP address and other technical data to JW Player and allow JW Player to set cookies on your end device if you wish to view videos on our website. We also provide a consent management function for this at the bottom of the page. You can use this to control whether JW Player is enabled or not.
The new “Latin America and the Caribbean Facility for Greening Public Development Banks and the Financial Sector” will help public banks in the region to align their operations with the Paris Agreement goals.
WASHINGTON – Germany’s Federal Ministry for Economic Affairs and Climate Action (BMWK), pledged EUR 20 million in grants to the Inter-American Development Bank (IDB) to establish the “Latin America and the Caribbean Facility for Greening Public Development Banks and the Financial Sector.”
The facility’s purpose is to help Public Development Banks (PDBs) evaluate their portfolios, integrate climate and socioenvironmental risks into decision-making processes, promote increased green lending, and facilitate access to climate and capital markets finance. As the most recent UN conference of parties on climate (COP28) highlighted, financial sector mobilization and sustainable financial sector practices are critical to address climate change. In this context, the facility includes mechanisms like issuing green bonds and implementing innovative sustainability-linked fund structures and instruments.
This contribution is part of BMWK’s International Climate Initiative (IKI) and aims to support PDBs in Latin America and the Caribbean in formulating institution-wide strategies that are consistent with the mitigation and adaptation goals of the Paris Agreement. Such strategies will promote the greening of the public financial sector by enhancing institutional capabilities and focusing on environmental, social, and climate considerations.
The facility also foresees the introduction of an innovative performance-based payments mechanism, which incentivizes PDBs to increase their portfolio share aligned with the Paris Agreement objectives. The facility will also catalyze and mobilize private climate funding. It is expected to leverage more than US$1 billion.
Beneficiaries of this facility also include members of the Green Coalition, which was launched at the Amazon Summit on August 7, 2023, in the context of the Amazonia Forever program.
Quotes
Ilan Goldfajn, President of the IDB, said, “We are delighted to partner with the German government to launch this facility that will enable public development banks in our region to align their operations with the Paris Agreement and contribute to climate action. By providing technical assistance, financial incentives, and access to green finance, this facility aims to transform the public financial sector into a powerful engine for low-carbon and climate-resilient development.”
Stefan Wenzel, Parliamentary State Secretary at the German Federal Ministry for Economic Affairs and Climate Action, said, “Transforming the financial sector is key for aligning financial flows with the goals of the Paris Agreement. Performance-Based Payments are an important instrument to achieve systematic change. We therefore intend a contribution of EUR 20 million to IDB, which will function as an incentive as it will enable IDB to hand out subsidized loans, if public banks achieve certain green indicators. These loans are supposed to have a catalytic effect for private capital. By this new, innovative mechanism, we make further progress on mobilizing private finance and aligning financial flows with the Paris Agreement goals.”
A joint effort by the IDB and BMWK that helps National Development Banks (NDBs) create and promote green financial tools for private investments in energy efficiency and sustainable projects. It has mobilized since 2016 additional donors such as SECO, Danish Energy Agency, NDF, GCF and the Ministry of Foreign Affairs of Sweden.
Learn more about how the IDB and Germany are working together.
About the IDB
The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-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 region. Take our virtual tour.
