Argentina will strengthen its capacity to plan and finance climate action, develop an enabling framework for sustainable finance to secure the investments needed for a sustainable and inclusive private sector transition, and boost the circular economy and decarbonization of economic activity with a $500 million loan from the Inter-American Development Bank (IDB).

This is the first of two consecutive technically linked but independently financed operations under the programmatic loan modality in support of policy reforms, which are aimed at invigorating the country’s sustainable and resilient growth.

These policy reforms are key to reducing greenhouse gas emissions in the sectors that generate 80% of them: energy, transportation, agriculture, livestock and land use change. The aim is to support the decarbonization of the economy and contribute to the goal set by the government to reduce annual CO2 emissions from 366 to 349 million metric tons by 2030.

As a result of the program, climate budget markers will be included in the national budget, including a line item for the conservation of more than four million hectares of native and protected forests. It will also contribute to the generation and registration, within two years, of 32 projects in the new National Registry of Climate Change Mitigation Projects.

As part of the Green Productive Development Plan, the number of renewable energy and energy efficiency projects supported is expected to increase from the current 17 to 160 by 2024, and to substantially increase the share of renewable energies in the national energy matrix.

On the financial side, it is expected to promote the issuance of green bonds, increase the number of banks that use environmental and social risk analysis systems to decide on the approval of their operations, and increase the participation of mutual funds that finance activities with a significant impact on social, environmental, climate or governance issues.