At least four Caribbean Community (CARICOM) countries are to benefit from US$600 million in financing for renewable energy and energy efficiency projects in Central America and the Caribbean over the next five years. The Inter-American Development Bank (IDB) says the Japan International Cooperation Agency (JICA) will also contribute funds towards the projects.
The framework agreement was signed during the IDB’s annual meeting on Friday between IDB president Luis Albert Moreno and JICA senior special advisor Hiroto Arakawa. The IDB said that Belize, Guyana, Jamaica and Suriname will benefit from the JICA financing as well as the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and Panama.
“For more than 30 years, Japan has been a great partner of the IDB and, in particular, of our borrowing member countries,” said Moreno, adding “this agreement is another example of Japan’s efforts to help our region overcome key development challenges.
“This contribution, in addition to encouraging the adoption of climate-friendly energy investments, will support much needed mitigation measures to address the negative impacts of climate change among our most vulnerable nations in Central America and the Caribbean.”
Arakawa noted that Central America and the Caribbean are at the core of JICA’s agenda to address global climate change. “We count on the IDB’s experience, knowledge and long-standing working relationship with the region to create a successful synergy in this effort,” he said.
Under the agreement, the IDB and JICA have created two different co-financing schemes: joint-co-financing, in which the IDB will match the financing provided by JICA in each project; and parallel co-financing, in which each organization will separately finance specific components of an eligible project.
JICA will provide US$300 million in concessional financing for the facility, which could potentially mobilize another US$300 million from the IDB’s own resources if all projects are financed under the joint co-financing scheme.