Small island nations of the Caribbean are particularly exposed to the impacts of climate change, because of their often vulnerable technical infrastructure and because of rising sea levels that threaten coastlines. For these countries, adaptation to climate change is as important as combating it. The EIB supported these efforts in a new multisector framework loan signed in May 2017 with the Caribbean Development Bank (CDB) as financial intermediary. The USD 110 million financing agreement funds investment projects in the Caribbean under the CDB’s climate action policy, building on a 2011 climate action line of credit, which supports nine projects in seven countries across the Caribbean. In addition, in November 2017 the Bank signed a further 20 million EUR loan to increase the finance for this operation.
The initiative is the EIB’s biggest ever loan in the Caribbean. Eligible investments include climate change mitigation, adaptation and resilience projects in the areas of renewable energy, energy efficiency, road transport, water infrastructure and community-level physical and social infrastructure that reduce greenhouse gas emissions and improve resilience to the impacts of climate change. The loan will allow the CDB’s member countries, most of which are small island developing states, to adequately tackle risks related to climate change with much needed low-cost financing to address the climate impacts already affecting these countries.
Since approval of the CDB’s Climate Resilience Strategy in 2012, 58% of projects financed have included climate change adaptation and/or mitigation elements. These projects have mainly been in the sectors of water, education, physical infrastructure such as sea defences, drainage, roads, and agriculture. A healthy pipeline of climate action projects amounting to over USD 300 million for this new loan has been developed with the support of an EIB-funded technical assistance programme.