The Inter-American Development Bank (IDB), an important source of financing for Latin America and the Caribbean, wants to be a “umbrella” for all the climate-related projects in the Amazon, said its president, Ilan Goldfajn, in an interview with the agency AFP.
(See: First blue bond in Colombia to finance water conservation).
Multilateral development banks like the IDB have a crucial role to play in ongoing efforts to further integrate climate issues into the international financial architecture, which will be discussed Thursday and Friday at a summit in Paris under the auspices of the French president. Emmanuel Macron.
“The Amazon is not a single country“recalls Goldfajn, who took over as head of the IDB in December and aspires to “create an umbrella program where we can join all initiatives“.
The Amazon covers almost 40% of South America and spans nine countries. In the last century it has lost close to 20% of its surface due to deforestation, but there are initiatives to recover it.
“There are in Brazil, Colombia, Peru, bilateral initiatives that involve European countries such as France, initiatives of our development bank and NGOs“, says the Brazilian, former president of his country’s central bank, who later went through the IMF.
In early June, the Brazilian president Luiz Inacio Lula da Silva resubmitted a plan for combat illegal deforestation in the Amazon, one of his government’s priorities since his return to power.
(See: Colombia and Germany sign agreement for the energy transition).
The IDB, created in 1959, has become the main international long-term financing institution for the countries of Latin America and the Caribbean.
last year approved $14 billion in loans, especially Argentina, Brazil and Mexico, in projects mostly related to water, energy and business development.
“These billions are important, but the most important thing is what we do with them“says Goldfajn, who wants more efficient financing of climate projects on an international scale.
The argument acquires even more resonance after several internal studies on the effectiveness of loans carried out in recent years by the evaluation and control office, an IDB body. In 2022, between a quarter and a half of the projects were rated positively.
(See: Danes Give Trash a New Life as Energy.)
The IDB has a double objective: lend better compared to past management and lend more to countries that suffered repeated economic crises since 2020 and climatic disasters, such as the drought that has affected much of Argentina and its neighbors for three years, with catastrophic consequences for local agriculture.
Ilan Goldfajn, president of the IDB.
AFP
“How many people are getting out of poverty, how many have access to sanitary facilities, fresh water, how many are connected? All this is the ultimate goal“said Goldfajn, who is asking for financing”innovative” and greater participation of the private sector, in the absence of international public financing.
Among the possibilities, he cites, for example, alleviating a country’s debt with its creditors in exchange for the government’s commitment to decarbonise your economy. Or better organize development aid and IDB loans to try to reduce interest rates on repayments.
(See: Antioquia, the country that produces the most greenhouse gases).
“We know how much we need for the climate, a trillion dollars, which is a lot. Do we have the money? We still have to see how much we can raise“, says the head of the bank.
Goldfajn also calls bet on lithium, whose reserves are immense in the region, estimated at two thirds of world reserves, an essential mineral for the economy of the future, particularly the manufacture of batteries.
“By applying the right public policies, the right approaches, we will become one of the main suppliers of minerals needed for the future.“, he points out, recalling that 30% of the energy produced in the subcontinent is already clean.
AFP
