Barbados to promote environmental sustainability with IDB guarantee

The Inter-American Development Bank (IDB) has approved a US$100 million (BDS$200 million) guarantee for Barbados that will help the Government access funds for conservation activities at reduced rates.

The Washington-based financial institution said the guarantee will allow the Government to create a long-term instrument to finance measures related to sustainability and marine conservation.

Barbados has 92 kilometres of coastline and the Government has set a target of dedicating 30 per cent of the island to conservation as a Marine Managed Area (MMA).

“The IDB guarantee will help reduce borrowing costs for the country as it seeks to raise funds for conservation activities, which include the creation of a conservation trust fund known as the Barbados Environmental Sustainability Fund,” the IDB said in a statement on Thursday.

“The operation, which is structured as a policy-based guarantee, will also support reforms to improve environmental governance and sustainable debt management in Barbados. In addition, it will support capacity-building in project execution within the responsible Ministry of Finance, Economic Affairs and Investment,” it added.

The IDB noted that the beneficiaries of this project will be “the citizens in Barbados who will enjoy the environmental and economic benefits of new protected areas and an enhanced natural capital”.

The IDB said this project is the first where it uses a guarantee to help a country create a long-term financing framework to use sustainable bonds for conservation measures.

It is also the first IDB public sector guarantee being delivered in collaboration with a non-governmental organisation – The Nature Conservancy, a global environmental nonprofit organisation that is expected to provide a co-guarantee of US$50 million (BDS$100 million).

The US$100 million (BDS$200 million) IDB guarantee has a maximum duration of 20 years.

“This operation marks an important milestone for the IDB in helping its member countries to leverage innovative financial solutions to address biodiversity and climate change, which are priority issues of its Vision 2025 strategy,” the IDB said.