IDB Invest and Finland Launch Blended Finance Climate Fund in Latin America and the Caribbean

IDB Invest, a member of the Inter-American Development Bank Group, and Finland announces the establishment of the Finland-Latin America and the Caribbean Blended Finance Climate Fund.

 

Finnish Minister for Development Cooperation and Foreign Trade Ville Skinnari and James P. Scriven, IDB Invest’s Chief Executive Officer in the signing ceremony in Washington D.C. Photograph: Inter-American Development Bank

This single-donor trust fund will receive a contribution of 50 million euros from Finland. The Fund will finance private sector climate mitigation and adaptation projects in the LAC region.

The region is facing adverse effects of climate change, which often impact women and people in vulnerable situations more severely. Finland is committed to curb climate change and boost climate resilience, while fostering equality and inclusion beyond its borders. The Fund will provide concessional financing to climate finance projects with a cross-sectoral focus on the poorest and most vulnerable countries and communities, gender equality, diversity, inclusion and biodiversity. 

Finnish Minister for Development Cooperation and Foreign Trade Ville Skinnari, on behalf of the Government of Finland, signed a contribution of EUR 50 million to the Fund. It will invest in climate mitigation activities that reduce greenhouse gas emissions and increase the capacity of carbon sinks, as well as in climate adaptation activities to support sustainable business models and vulnerable communities across the region. 

IDB Invest will originate, execute and manage the Fund’s blended finance resources using various investment instruments, including debt instruments, guarantees and equity investments, as well as performance-based incentives.

“Finland has been a key partner in our efforts to lead by example on climate change action as demonstrated by their recent entry to our NDC Pipeline Accelerator Multi-Donor Trust Fund. Today, we are expanding our partnership by establishing this blended finance Fund to address climate change in collaboration with the private sector and create meaningful opportunities for women and vulnerable communities across Latin America and the Caribbean,” said James P. Scriven, IDB Invest’s Chief Executive Officer.

”Many countries in Latin America and the Caribbean need innovative ways to attract private investments for ambitious climate activities. Finland wants to collaborate and offer our expertise with partners in the region for effective climate action,” said Minister Skinnari.

The Fund's purpose is aligned with the IDB Group Climate Change Action Plan, which emphasizes the essential role that partner resources play in promoting sustainable development, as well as and with the institution's commitment to the 2030 Agenda in Latin America and the Caribbean. Moreover, the Fund will also be aligned with other donor trust funds administered by the IDB Group with a mandate to invest in projects that contribute to climate change mitigation and adaptation through private-sector financing. 

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