Look beyond IMF as access to climate finance tightens – senator

Barbados must move swiftly to build new development partnerships and reduce its reliance on traditional international lenders as access to global climate finance becomes increasingly limited, Senator Shantal Munro‑Knight told the Senate on Wednesday.

The upper chamber took up the Development Bank of Latin America and the Caribbean Bill to formalise Barbados’ full membership of the CAF by repealing and replacing the Latin American Development Bank Act.

Senator  Munro‑Knight, minister in the Prime Minister’s Office with responsibility for Culture, said that while some global institutions were retreating from climate financing, CAF provided a regional alternative that was flexible, responsive and designed for small states such as Barbados.

She said: “What we are seeing globally is that there are increasing calls for the IMF to go back to its core mission, and that means moving away from climate financing. That has implications for countries like ours that are middle‑income and vulnerable to external shocks. If that space closes, where will we go for concessional finance?”

“That is an external policy shock. It is not one that we create, but one that we must prepare for. We cannot simply wait to see what happens to climate financing or ODA (official development assistance) flows; we have to create our own buffers and partnerships.”

Senator Munro‑Knight noted that foreign aid to Latin America and the Caribbean was declining, while private capital was being drawn mainly into energy projects, leaving social and developmental sectors underfunded.

She said: “When you look at ODA flows, they are trending downwards in Latin America and the Caribbean, and where private capital is going, it is largely into energy. That means that sectors such as health, education and housing are being left behind, and those are the areas that matter most to our people. We must therefore diversify where we go for financing. CAF is one of those institutions that understands our realities, because it is of the region. It allows us to speak with one voice and to shape solutions that work for the Caribbean.”

Under the new legislation, Barbados will acquire
34 834 registered Series C shares in CAF, each valued at US$14 200 and totalling US$494.6 million. Munro‑Knight said that although it was a significant investment, it would give the country access to financing worth 18 times that amount over the course of 15 years.

She explained that the bill would enable Barbados to upgrade from Series C to Series A shares, transitioning to full membership status and giving the country a seat on CAF’s board of directors. Full membership, she added, would strengthen Barbados’ influence on regional decision‑making, provide access to both public and private‑sector financing, and support CAF’s plan to open an office in Barbados.

The senator said CAF had already demonstrated its value as a development partner. Within two weeks of discussions with the Barbados Water Authority, the bank approved US$700 000 ($1.4m) in technical assistance to tackle water losses by embedding technical experts in the agency. CAF has also financed work on roads and water infrastructure, particularly on the South Coast.

In the cultural sector, she said CAF granted
US$225 000 ($450 000) to support CARIFESTA, funding delegations, public relations and infrastructure. The bank also supported the Reclaiming Our Atlantic Destiny heritage initiative which seeks to digitise national archives, develop a heritage district, and build both an ancestral memorial at the Newton Slave Burial Ground and the Richard Stoute Amphitheatre at the National Botanical Gardens.

CAF also funded the modernisation of air‑navigation systems at Grantley Adams International Airport.

Senator Munro‑Knight said Barbados would make its investment over 15 years, allowing the country to manage its financial outlay while gaining immediate access to development resources from December.

The move would help safeguard Barbados’ fiscal space and strengthen its ability to respond to climate and development shocks, she said. (SZB)