As one of the leading development partners for Latin American and the Caribbean (LAC), the Inter-American Development Bank Group (IDB Group) is fully committed to lead by example on climate change action. Since the signing of the Paris Agreement, the IDB Group has provided over $20 billion in Climate Finance, amounting to about 60% of all Climate Finance to the region from Multilateral Development Banks (MDBs).
Our Vision 2025 and our Climate Change Action Plan 2021-2025, both published in 2021, respond to complex realities in LAC, which include planning for recovery post-COVID-19, increased fiscal constraints, and greater debt. The IDB Group sees opportunity amid the challenges with a pivot to a green recovery—because it is a sustainable recovery. In fact, we are working with our 26 borrowing member countries to ensure they have access to the resources and tools needed to promote a green, sustainable, and potentially transformational recovery. As a development institution, we are focused on addressing the causes of poverty and vulnerability: our work on climate will pave a new way to have greater impact in the long run.
We strive to enhance our role in the green economic recovery and respond with ambition and accountability to the mounting challenge of climate change. For this reason, we set aspirational targets to align 100% of new operations with the Paris Agreement goals by January 2023, and to deliver a total of $24 billion in green and Climate Finance in the next four years.1 We are also ready to redouble our efforts to mobilize private capital for climate action and to deploy capacity building efforts at a pace and scale that meet the magnitude of the challenge ahead.
To be accountable for these targets, the IDB Group is committed to improving the coherence and transparency of its reporting. Throughout 2022 we will be developing a new green finance accounting methodology. The new approach will allow us to fully capture the value of green contributions and incentivize the catalytic sustainability investments needed to shift emissions and climate vulnerability trajectories in the region.
These efforts will require us to build capacities at an unprecedented scale, both within our institution and on various external fronts. To lead these efforts, we have already started placing climate change and sustainability specialists in country offices across the region. We have increased our presence from five countries in 2020 to 15 countries in 2021, aiming to cover all 26 countries by 2024. These movements will better enable our country specialists to work with governments on climate policy and plans, align the array of the IDB’s financial tools and technical know-how with national climate plans and policies, and help countries access concessional finance and mobilize private finance to deliver national commitments.
With our firm grasp of the key issues driving development and investment in the region, at the IDB Group will continue to help build the capacity of our partners. In doing so, we will ensure climate action is not merely compatible with economic growth; rather, our raised ambition on climate and our commitment to work with our partners towards decarbonization, will be the drivers of innovation for a new era of competitiveness in the LAC region.
1This commitment is pending approval by IDB Group’s Board of Directors, expected in 2022.