The Inter-American Development Bank (IDB) has announced three new partnerships with international development organizations to support the development of green bond markets in Latin America and the Caribbean and other emerging markets. The partnerships were announced during the Finance in Common Summit, which took place on September 4-6 in Cartagena, Colombia.
The partnerships are part of efforts by the IDB and other international and regional development institutions to increase their level of cooperation to improve synergies and mobilize more private capital to help developing countries meet their commitments under the Paris Agreement and advance their sustainable development goals.
1) KfW Development Bank Teams Up with IDB to Boost Green Bond Market Development
KfW Development Bank on behalf of the German Federal Ministry for Economic Cooperation and Development have signed a letter of intent with the IDB to create the Green Bond Partnership (GBP). The Partnership will provide EUR 2 million for the IDB to finance measures to develop and promote standards, best practices, and financial instruments to enhance the development of green bond markets in Latin America and the Caribbean.
The Partnership will also strengthen the IDB’s Green Bond Transparency Platform (GBTP) and support capacity building, standardization, and digitization of green bond information, regulatory support for taxonomies, as well as create a knowledge academy to facilitate well-informed investment decisions in this type of asset.
2) IDB and IDB Invest Join Global Green Bond Initiative
During the event, the IDB and IDB Invest joined a group of six other development organizations to support green bond markets in emerging markets and developing economies, as part of the Global Green Bond Initiative (GGBI) led by the European Commission.
As one of the key partners of the initiative for Latin America and the Caribbean, IDB and IDB Invest are expected to channel resources from GGBI to support the origination of green bonds, provide incentives to support market development and promote the adoption of verification processes and compliance with international and harmonized reporting standards.
Moreover, the initiative is expected to support the adoption of the IDB’s Green Bond Transparency Platform, which currently operates in Latin America and the Caribbean, as a key platform to report on green bond results in other regions.
Besides the IDB and IDB Invest, the cooperation brings together the European Investment Bank, the European Bank for Reconstruction and Development, the Italian Cassa Depositi e Prestiti, the Spanish agency for International Development Cooperation (AECID), the German KfW Development Bank, the French PROPARCO of the AFD Group, acting as Team Europe, as well as the Green Climate Fund.
3) Globalization of the Green Bond Transparency Platform (GBTP)
To further support the expansion of the Green Bond Transparency Platform (GBTP) as a key reporting tool for green bonds globally, four international development organizations endorsed during the event a joint declaration expressing their support to promote the adoption of the platform by other countries outside the Latin American and the Caribbean region.
The endorsement is part of a joint declaration where the IDB, the European Investment Bank (EIB), the Agence Française de Développement (AFD), KfW Development Bank, and the Spanish Agency for International Development Cooperation (AECID) pledge to work together to increase transparency in green bond markets.