Inter-American Development Bank

Background

IDB logo

Source: IDB. Author: IDB. Permission: IDB.

The IDB was established in 1959 to support economic and social development in Latin America and the Caribbean, and is currently the region's main source of multilateral financing. In partnership with governments, companies and civil society organizations, the IDB aims to provide solutions for a wide range of development challenges. It does so through projects, research, advice and technical assistance, on issues such as poverty reduction, agriculture, trade, infrastructure and energy.² In 2009 the IDB celebrates its fiftieth aniversary.³

The IDB is headquartered in Washington DC and has 48 member countries, of which 26 are borrowing member countries.  Each member country is represented on the Board of Executive Directors, which "establishes the Bank's policies, approves projects, sets interest rates for Bank loans, authorizes borrowings in the capital markets, and approves the institution's administrative budget." Louis Alberto Moreno of Brazil serves as the current president and legal representative, and manages the Bank's day-to-day operations and administration. The organization has around 2,000 employees, based either in Washington DC or in one of the borrowing member countries.⁴ The organization currently has around 600 projects, and has approved over US$10 billion over the last twelve months.⁵  

Sustainable energy and climate change initiative

Within the IDB, the Sustainable Energy and Climate Change Initiative (SECCI) is responsible for climate change related projects and research activities.  In 2009 the IDB created the Energy and Climate Change Unit (ECC), which is responsible for the management and development of the Initiative. The goals of  SECCI are "centered around the provision of comprehensive sustainability options in areas related to the energy, transportation, water and environmental sectors as well as that of building climate resilience in key priority areas vulnerable to the impacts of climate change." The Initiative consists of four strategic pillars:⁶

• The first is " renewable energy and energy efficiency (RE/EE)."  Priority activities include the assessment of potential for renewable energy and energy efficiency to meet energy needs; the establishment of more favorable regulatory, policy and financial conditions for RE/EE; the mainstreaming of RE/EE in the IDB projects; and the development and upscaling of new RE/EE technologies.⁷
• The second is "sustainable biofuel development". The most important objectives of this pillar are to assess the economic viability of fostering biofuels,while taking full consideration of environmental and social benefits and risks; to assist countries to remove financial and policy barriers in the development of biofuels;  to provide lending for feedstock development, biofuel production facilities, and related infrastructure; and to finance the adaptation of new and emerging biofuel technologies.⁸
• The third is "access to carbon markets." This pillar aims to mainstream carbon finance, including the Clean Development Mechanism (CDM),  in IDB projects; to support CDM projects that support removal of regulatory barriers to sustainable energy projects and programs; to stimulate lowering of transaction costs and risks for CDM project development; to build capacity to strengthen the region's participation in the international carbon market; and to offer technical assistance for developing technologies that promote the continuity of the carbon market after 2012.⁹
• The fourth is "adaptation to climate change." Under this pillar the SECCI assists countries "on their efforts towards a climate resilient and carbon neutral economy through the incorporation of adaptation strategies into sectoral, national/sub-national and/or regional planning." It provides financial and technical support to the member countries to strengthen or build institutional capacity to identify and assess vulnerability to climate change through using of climate change models; to design and implement pilots of adaptation measures; to promote preventive risk management and risk reduction strategies, including economic diversification; and to "assess key policy and regulatory instruments such as price signals, environmental markets, construction standards and public private partnerships, and the integration of these within regional, national or sectoral climate resilient plans and strategies as appropriate."¹⁰

Projects in small island developing states

The IDB has a number of smaller and larger projects related to climate change adaptation and mitigation in small island developing states (SIDS) in the Caribbean region. 

The Caribbean Carbon Neutral Tourism Project is currently under implementation (2009-2011)  in the Bahamas, Belize, Guyana and Trinidad and Tobago; four countries in which tourism is an important part of the economy, and which each have a very different type of tourism. In the Bahamas cruise ship tourism is dominant; in Trinidad and Tobago resort tourism prevails; in Belize dive tourism is popular, and in Guyana most tourist related income comes from small-scale ecotourism and cultural tourism.¹¹ The objective of the US$1,088,550 project is to "assist the Caribbean region, coastal states and SIDS, in its response to climate change by enhancing its climate resilience, specifically by devising ways of attracting new sources of financing for the scaling-up of low carbon investments in the tourism sector; and reducing the sector's vulnerability to climate change."¹² The Caribbean Community Climate Change Center (CCCCC) is the implementing agency for the project.¹³

The Electricity Distribution Network Rehabilitation Project is a 152,500,000 million dollar project in the Dominican Republic that began the implementation process in early 2009. The project aims to reduce greenhouse gas emissions through reduced electricity consumption as a result of reduced technical and nontechnical losses in the grid. To achieve this, the project finances "rehabilitation of electricity networks, adding and regularizing users, enhancing energy efficiency, and improving the quality of electricity service, as well as activities enabling the companies to establish closer ties to the communities, especially those with low rates of collection and high levels of electricity theft." The project is cofinanced by the World Bank and the Dominican Republic.¹⁴

Adaptation for Climate Change and Disaster Mitigation in the Caribbean "consists of a study to evaluate the possibilities and comparative advantages for the countries of the region of carbon sequestration and renewable energy development, with the aim of taking advantage of the innovative financial mechanisms of the protocol of the Clean Development Mechanism and the Global Environment Facility, which can lead to new development and capital flow opportunities." The project was implemented from 2005-2008, and mostly financed by the Netherlands-IADB Partnership trustfund.¹⁵

The Coastal Risk Management Program (CCLIP) is planned to be implemented in Barbados from 2010. Projected components of the project include:

1. Coastal risk assessment and monitoring including strengthening and expansion of monitoring networks (slope stability, water quality, natural hazards), oceanographic studies and risk assessments.
2. Coastal infrastructure, including construction and pre-investment studies for beach stabilization works.
3. Institutional strengthening for coastal risk management and climate change adaptation.¹⁶  

Footnotes

1. IDB. Sustainable Energy and Climate Change Initiative. Retrieved June 28 2009.

2. IDB. About us. Retrieved June 28 2009.

3. IDB. Five things you need to know about the IDB. Retrieved June 28 2009.

4. IDB. IDB Presidency. Retrieved June 28 2009.

5. IDB. Basic Facts. Retieved June 28 2009.

6. IDB. Sustainable Energy and Climate Change Initiative. Retrieved 28 June 2009.

7. IDB. Sustainable Energy and Climate Change Initiative: Renewable Energy and Energy Efficiency. Retrieved June 28 2009.

8. IDB. Sustainable Energy and Climate Change Initiative. Biofuel Development. Retrieved June 28 2009.

9. IDB. Sustainable Energy and Climate Change Initiative: Access to Carbon Markets. Retrieved June 28 2009.

10. IDB. Sustainable Energy and Climate Change Initiative. Adaptation to Climate Change. Retrieved June 28 2009.

11. IDB. Caribbean Carbon Neutral Tourism Project, RG-T1640: Plan of Operations. 2008. Paragraph 2.1.

12. IDB. RG-T1640: Caribbean Carbon Neutral Tourism Project. Retrieved June 28 2009.

13. IDB. Caribbean Carbon Neutral Tourism Project, RG-T1640: Plan of Operations. 2008. Paragraph 3.1.

14. IDB. DR-L1026 : Electricity Distribution Network Rehabilitation Project. Retrieved June 28 2009.

15. IDB. TC0002034: Adaptation for Climate Change and Disaster Mitigation in the Caribbean. Retrieved June 28 2009.

16. IDB. BA-L1014 : Coastal Risk Management Program (CCLIP). Retrieved on June 28 2009.

Resources

CDERA, ADPC, IDB. Adaptation to Climate Change and Managing Disaster Risk in the Caribbean and South-East Asia: Report of a Seminar. Barbados, July 24 – 25, 2003.

IDB. Céline Charvériat. Working Paper #434. Natural Disasters in Latin America and the Caribbean: An Overview of Risk. October 2000.

IDB. Sustainable Development Department. Responding to Climate Change: A Proposed Framework for Action, Discussion Paper. March 2000.

IDB. Sustainable Development Department. Christiana Figueres. Institutional Capacity to Integrate Economic Development and Climate
Change Considerations An Assessment of DNAs in Latin America and the Caribbean. October 2004.

IDB. Project: RG-T1574 - Climate Change Modeling for Latin America and the Caribbean. Retrieved June 28 2009.