Workshop Discusses Green Credit for Climate Change Mitigation in LAC Energy and Agriculture
story highlights

A workshop organized by the Inter-American Development Bank (IDB) and others discussed how development banks can design, develop and promote "green" financial instruments that promote climate change mitigation in Latin America and the Caribbean through support for projects in renewable energy, energy efficiency and sustainable agricultural practices.

IDB3 December 2012: The Inter-American Development Bank (IDB) co-organized a regional workshop for the Latin American banking sector, particularly development banks, to promote dialogue on financial instruments that promote climate change mitigation through energy efficiency, renewable energy and agricultural projects in Latin America and the Caribbean (LAC).

The “Financial Instruments to Promote Sustainability and Climate change Mitigation – The Experience of Financial Institutions in Latin America and the Caribbean” workshop was held from 29-30 November 2012, at the facilities of the Trust Funds for Agriculture (FIRA) in Morelia, Mexico.

On the first day, the workshop opened with three sessions on: the market, challenges and opportunities for “greening” financing in LAC; key elements for structuring financial instruments to support renewable energy and energy efficiency programmes; and LAC examples of special financial instruments and “green credit” programmes, such as the “Green SMMEs Initiative” launched by the Central American Bank for Economic Integration’s (BCIE) and German Development Bank (KfW) to support small energy efficiency and renewable energy projects in Central America.

In the afternoon, participants broke into small discussion groups to exchange views on: what are the principal challenges facing green financing in LAC; what are best practices in promoting new business with green financing; which types of instruments are the most effective; and what are the capacity building needs in the region, both in the financial and private sectors.

On the second day, workshop participants broke into two parallel working group sessions, one focused on green financing for energy, the other on agriculture. Each looked at specific issues and case studies, and discussed the pros and cons of different approaches, lessons learned, risks and market barriers identified, and special considerations to take into account for successful green credit in the sector under discussion. The agriculture working group looked at: deforestation reduction, reforestation, and forest management; REDD; carbon credits; environmental services; biodiversity protection; soil conservation and rehabilitation; organic agriculture; risk management; and efficient water and energy use. The energy group focused on promoting energy efficiency and savings.

The workshop concluded with a discussion of the way forward, including action plans that can be adopted, and what sort of alliances with regulatory and government agencies to forge, in order to gradually improve the creation of green credit lines offered in LAC.

The workshop was co-organized by IDB, FIRA, the Latin American Association of Development Finance Institutions (ALIDE) and the French Development Agency (AFD). [BCIE Press Release (in Spanish)] [Workshop Agenda (in Spanish)]

related posts