Straughn lays Blue-Green bill, counts pledges to new financier

n the verge of establishing a new financial institution, the government has secured $155 million (US$77.5m) to launch the Barbados Blue Green Bank, Minister in the Ministry of Finance Ryan Straughn has announced, as he brought the legislation to set up the bank to House of Assembly lawmakers on Tuesday.

Under the Barbados Blue Green Bank Bill, the bank is intended to reduce the cost of financing in support of projects that strengthen climate resilience and respond to climate change impacts in the region, supporting both the green and blue economies.
Straughn told the House that in addition to the Mottley administration’s pledge of $30 million (US$15 million) to help capitalise the bank, the governments of Guyana and Bahamas have also confirmed they will each pump $30 million into the new financial institution.
Providing some background to the bank’s establishment, the Christ Church East Central MP told parliament: “We reached out to the Green Climate Fund (GCF) [of the World Bank] and having had those initial discussions, we wanted to have further engagement of the GCF in the region to be able to respond specifically to the climate concerns of the region.”
According to Straughn, the government envisioned the creation of this institution that would be an intermediary “to be able to create the financing options and instruments that would help to deliver on a number of critical objectives”.
He explained: “The GCF and the government of Barbados agreed that we would set up this institution. The Barbados government, having entered into a second International Monetary Fund (IMF) programme that allowed us to access resources from the Resilience and Sustainability Trust (RST), we set aside US$15 million from the resources from the RST to provide initial capital for the bank.”
The World Bank’s Green Climate Fund, he detailed, agreed that it too would provide $30 million to support the bank’s creation. The United States Agency for International Development (USAID) also agreed to support the bank with $5 million ($2.5 million), not through cash but in the provision of technical assistance in conceptualising and bringing the project to fruition.
Straughn revealed also that the government had reached out to several other parties who recognised that the island was advocating for climate justice and the causes of small island developing states (SIDS) globally.
Among those that have responded, he told the chamber, included the Development Bank for Latin America and the Caribbean or Corporación Andina de Fomento (CAF) which has pledged $30 million, as well as the governments of Guyana and the Bahamas.
“The GCF headquartered in South Korea as well as the CAF, they all want to help, not just Barbados but the region to unlock those critical resources from the private sector as well as other sources to respond to this area.”
“Why is this important? At a time when everybody is going through a lot of issues globally … and the legacy lending in respect of these development challenges in the region, it is important to recognise the [need for] flexibility.”
He added: “There will be no loose lending, but because it is entirely focused on reducing the cost of capital for climate resilient areas in the green and blue economy, the Blue Green Bank will work in collaboration with other financiers to lower the cost of being able to fund these interventions.”
Straughn assured that the bank will not rely only on the pledges it already has but will be going after additional funding. (IMC1)