Barbados launched the world’s first debt-for-climate-resilience operation

The Government of Barbados has successfully completed a climate-debt operation that will finance climate-resilient water and sewerage projects, generating fiscal savings equivalent to 125 million dollars.

The operation consists of a long-term Sustainability-Linked Loan in local currency granted by regional banks and organized by the CIBC Caribbean bank. The loan is backed by 300 million dollars in guarantees composed of: i) 150 million dollars from the Inter-American Development Bank (IDB); and ii) 150 million dollars from the European Investment Bank (EIB), within the European Union’s Global Gateway Initiative.

In addition, the IDB and the Green Climate Fund (GCF) will provide a total of 110 million dollars in upfront financing for the water and sewerage projects, including a 40 million dollars grant from the GCF.

The transaction will help Barbados advance its resilience plans outlined in its updated Nationally Determined Contribution (NDC) and its Investment Plan for Prosperity and Resilience, in alignment with the Paris Agreement and the country’s Roofs to Reefs Programme.