27/02/24

GREEN FINANCE: First climate finance fund in Latin America and the Caribbean is established

As published on: theweeklyjournal.com, Tuesday 27 February, 2024. 

With an investment of $65 million, the Development Bank of Latin America and the Caribbean (CAF) together with the Development Finance Institution of Canada (FinDev Canada) and IDB Invest will promote sustainable development and climate resilience in the region.

The agreement, signed with DIC Latin American Fund IV, L.P. (Darby IV), is the first private credit climate finance fund in Latin America and the Caribbean (LAC) that seeks to support climate change mitigation and adaptation efforts.

Darby International Capital LLC, the corporation that manages Darby IV, a 10-year, $400 million climate-focused debt fund, will allocate 40% of invested capital to climate finance transactions and will also provide clients with guidance on how to identify and mitigate climate risks, enabling companies and projects to adapt effectively to climate change.

"This investment is aligned with CAF's strategic objectives to consolidate Latin America and the Caribbean as a region that contributes substantially to reversing climate change and its effects, through greener and more sustainable investments in our countries," said CAF's vice president of the private sector, Jorge Arbache.

The partnership between FinDev Canada, IDB Invest and CAF promotes private institutional development and capital to support access to long-term financing tailored to the needs of underserved medium-sized enterprises for low-carbon and resilient operations in the region.

By supporting medium-sized enterprises, the effort will also promote their economic growth, employment opportunities and sustainability.

For FinDev Canada's Vice President and Chief Investment Officer, Paulo Martelli, "with this transaction, FinDev Canada emerges as a significant partner for an experienced fund manager in its first inaugural climate-focused fund, which offers a great opportunity to continue supporting climate action in the region."

For her part, the director and manager of financial institutions at IDB Invest noted that "climate investments to mitigate and adapt to climate change are an integral part of IDB Invest's strategy for LAC, and we are honored to support the first private climate finance credit fund in the region."

Tags

Climate finance fund Green finance ESG Latin America Latam Caribbean