The Green Finance LAC Platform (GFL) is a knowledge exchange Platform that has been developed to respond to a demand of National Development Banks, financial institutions of the private sector and players of the financial market for sharing information and knowledge about green financing.
Promote Sustainable Instruments for Development through the knowledge exchange of green finance among public sector players, financial institutions of the private sector and players of the financial market.
Respond to a demand of National Development Banks, financial institutions of the private sector and players of the financial market for sharing information and knowledge about green financing.
Latest trends and practices in developing and promoting green finance strategies and innovative risk sharing mechanisms.
Scale up private and public sector investment in climate actions and the implementation of the contribution determined at the national level within the framework of the Paris Agreement, as well as the achievement of the Sustainable Development Goals, especially SDG 7.
Latin America and the Caribbean (LAC) are rich in renewable and nonrenewable energy resources, including fossil fuels, hydroelectricity, biofuels, wind, geothermal and solar energy. The region’s renewable resources include wind, geothermal, water, and solar energy, which compose more than one fourth of the region’s energy resources, and which represent about twice the global average. The combination of hydroelectricity, of which many electrical systems in the region depend, and the diverse sources of renewable energy, constitutes a key factor for the expansion of renewable energies. The various countries of the region are making progress in their efforts to diversify their electrical systems and are working on the establishment of environments – both political and regulatory – more appropriate for the necessary energy transition. However, the existing energy wealth is not evenly distributed. Some 34 million people in the region still lack access to modern electricity services, while fossil fuel imports often have a heavy budgetary impact, particularly in some of the smaller countries.
As specified in its sectorial strategy, the Inter-American Development Bank (IDB) provides assistance to member countries in order to expand the coverage and quality of energy services, such as electricity and natural gas, and expand and diversify their energy sources in the context of carbon restrictions. It also finances programs to improve energy efficiency and thereby make economies more competitive, while also promotion cross-border energy integration. These efforts also help to expand private investment in climate actions and the implementation of the contribution determined at the national level within the framework of the Paris Agreement, as well as the achievement of the Sustainable Development Goals, especially SDG 7.
The manufacturing industry calls the shots in the development processes of the countries of the region. The manufacturing industry is an important source of jobs and economic development, effectively creating more than 10% of employment in Latin America and the Caribbean. Although some LAC countries have achieved production scales that make them competitive internationally, our countries still need to go a long way to achieve the same levels of productivity, efficiency, and innovation needed to boost the development of the sector in the medium and long term. The productivity of companies in Latin America and the Caribbean is of vital importance to be able to compete in the future in a sustainable manner by continuing to create employment along the value chain and reducing the impact of manufacturing activity on natural resources.
To that end, the IDB Group finances sustainable enterprises and projects to achieve financial results and maximize economic, social, and environmental development in the region. Environmental and social aspects, gender equality, climate change, and corporate governance are taken into account.
The IDB works to facilitate universal access to quality housing, addressing the quantitative and qualitative gaps that exist in the sector, particularly those related to the implementation of inclusive housing programs
In addition, given the very high level of urbanization in the Latin American and Caribbean region, which will continue to grow, the Bank promotes actions to increase the resilience of cities. IDB’s major goals include preserving the social capital installed in housing, protecting natural and built environments, preserving the unique cultural legacies of the dynamic urban spaces of the region, developing strategies for managing urban risk and social infrastructure, the revitalization of degraded areas and underutilized urban gaps, and the development of mitigation strategies for the sustainable financing of infrastructure.
Rapid population growth, high rates of urbanization, and the widespread use of vehicles with internal combustion engines have generated great challenges in mobility, particularly in urban areas of Latin America and the Caribbean (LAC). The transportation sector is therefore of crucial importance for sustainable development. The governments of the region are working to shorten the gap between the supply and demand of transport, aiming to provide the widest geographical coverage and systems that operate in a safe, accessible, and favorable manner for the environment and their people. Several countries and cities in the region are taking action to reduce the considerable greenhouse gas emission from transport and, at the same time, reduce local pollution. These efforts include the development of rapid bus transit systems and the increasing introduction of electric vehicles in public transport systems. These transformations are the key to the sustainability of transport, since systems through private bus networks are the main mode of transportation for passengers in the region.
The Transportation Division of the Inter-American Development Bank pursues the objective of promoting the economic development and the quality of life of the inhabitants of the region. It does so through transportation activities and infrastructure that are carried out in an efficient, accessible, sustainable, and safe manner.
The LAC region leads net food exports and is a key provider of global environmental public goods, such as biodiversity and forests. It is also a net exporter of basic grains. Consequently, the region has a critical role in achieving global food security and sustainability. To achieve these objectives in the long term, robust policies, investment in research and development, infrastructure development, and robust governance of the abundant natural resources of LAC are necessary. It is necessary to be able to continue contributing to food security, reduce sectoral vulnerability to climate change, and contribute to its mitigation. LAC greenhouse gas emissions from agriculture accounted for about 19% of total agricultural emissions on a global scale. Here emerges the importance of tackling climate change and adopting paths of long-term sustainability.
The IDB seeks to accelerate growth and agricultural production in Latin America and the Caribbean and at the same time promote the efficient and sustainable management of natural resources in order to improve food security, raise the income of rural populations, and reduce poverty.
The forests of Latin America and the Caribbean cover almost half of the land area of the region. Forests provide products and services that contribute to socio-economic development, the protection of the environment, and the provision of critical ecosystem services. They are essential for their lives of millions of people in the region, mainly in rural communities and those living in poverty, as they provide food and other non-wood products, and important eco-systemic services. Sustainable forest management and forest conservation are essential for the achievement of the SDGs in the region. In addition, emissions from land use, land use change, and afforestation in the region reached almost half of global GHG emissions in 2011.
The IDB seeks to ensure the maintenance and improvement of forests in this area in order to increase production, ensure productivity of the sector, avoid deforestation and forest degradation, and reduce their vulnerability to the impacts of climate change. The IDB works with due consideration for the role that forests play in protecting the environment, the global climate, and as a vital support for several groups.
Today, Services represent around two thirds of the total global value added. Services are the predominant sector of the economies of Latin America and the Caribbean (LAC), in terms of their contribution to output and employment, representing 70% of GDP and 62% of total employment in 2015, although there are different estimates of the level of that participation. The role of this sector in the economies of the region in sometimes questioned by the low growth in their productivity, which delays sustainable development with equity. The productivity in this sector grows very little because of the strong concentration in activities characterized by a high degree of informality and self-employment. Another characteristic of services in LAC is their very low level of internationalization, given that most companies in this sector do not export. One of the recent concerns is the reduction in the participation of services in the economies of the region since 2000, mainly due to the growing importance of agriculture in a process of reprimarization of the economies of the region. However, there are many service activities that, by contrast, are highly productive, with a great innovative capacity and that are successfully inserted into international trade, although their participation in GDP and employment are even lower. Examples of these dynamic activities are business services, finance and insurance, scientific and technological innovation, computer services, and telecommunications. With automation, robotization and artificial intelligence, productivity and growth and exports of services will be significantly increased.
For the IDB, the services sector is crucial for the sustainable development of LAC, since it contributes to giving the economy a greater dynamism and creates employment and well-being, Innovation in the sector is essential to ensure robust and competitive growth of services in the region.
Who is part of GFL
The GFL Platform has been developed by the Connectivity, Markets and Finance Division (CMF) of the Institutions for Development Sector (IFD) of the Inter-American Development Bank (IDB) in cooperation with the Latin American Association of Development Financing Institutions (ALIDE) to support the exchange of experiences of NDBs in the region on green finance through Technical cooperation projects.
This platform is sponsored by technical cooperations executed by the IDB with resources from: