Caribbean Development Bank, European Investment Bank, FMO, IFC and PROPARCO to increase coordination and support of sustainable solutions for the region’s financial, tourism and infrastructure sectors
Today, five leading international financial institutions active in the Caribbean reinforced their commitment to ensuring long-term economic growth across the region, resilience to the global financial crisis and effective deployment of assistance for reconstruction efforts in Haiti with agreement of the Caribbean Joint Action Plan. Institutions participating in the landmark agreement were the Caribbean Development Bank (USD 300m), the European Investment Bank (USD100m), the Netherlands Development Finance Company FMO (USD 100m), the International Finance Corporation - part of the World Bank Group (USD 150m), and PROPARCO - the private sector arm of the Agence Française de Développement Group (USD 200m). The signature ceremony took place on the sidelines of the Caribbean Development Bank’s annual meeting currently underway in Nassau, Bahamas.
The Caribbean Joint Action Plan will enable more effective use of financial and technical assistance by encouraging a stronger focus on each participating institution’s experience and capabilities. Joint investment under the plan will concentrate on crucial economic sectors most impacted by the economic slowdown: finance, tourism and infrastructure. It is expected that this approach will further support economic growth in the region by mobilizing IFI investment to act as a catalyst for private sector engagement and facilitating national and sub-regional support and policy dialogue amongst both private and public stakeholders.
The Caribbean Joint Action Plan demonstrates the collective support of the five signatory institutions to supporting Haiti following the recent devastating earthquake. This includes technical assistance and reinforced coordinated financial engagement that focuses on rebuilding the private sector and strengthening its role in Haiti’s economic development.
Mr. P. Desmond Brunton, Vice-President (Operations) of the Caribbean Development Bank indicated that “This joint approach to helping the Caribbean Countries address their challenges is critical to the effective use of development assistance, especially in this period of uncertainty.”
“The European Investment Bank welcomes this landmark initiative to work more closely with our partner institutions to support long-term economic growth across the Caribbean, make best use of our respective experience and facilitate recovery in Haiti”, said Plutarchos Sakellaris, European Investment Bank Vice President responsible for the Caribbean.
“FMO strongly supports this action plan since it unites two of our core objectives: providing support for a region that lacks commercial finance to spur growth and cooperating with well respected partner institutions. Especially in these times providing access to finance is imperative to current and future generations of Haïti and other Caribbean nations”, said Jurgen Rigterink, Chief Investment Officer of FMO.
“The International Finance Corporation, the largest multilateral for the private sector, joins this initiative that will help coordinate efforts and create synergies among development institutions. It will expand our ability to accomplish greater development impact in the Caribbean, with special focus on infrastructure, the financial sector, and job-creating industries such as tourism”, said Jyrki Koskelo, IFC Vice President for Global Industries".
“The Caribbean region lacks long term funding from commercial sources, and deserves a well coordinated and strong response and support from the DFI community. This important initiative is for us a great way to catalyze efforts. Within our community, Proparco’s objective is to scale up significantly its operations in the region, both in the infrastructure and in the financial sector” said Laurent Demey, Proparco’s Deputy CEO.
Each institution will finance their own projects within the sector scope with co-financing opportunities being examined in a case-by-case basis. Specific efforts will also be taken to foster public-private sector policy dialogue in the region, supporting governments’ macroeconomic and structural reform and in coordination with IMF, World Bank and Caribbean Development Bank programmes.
The institutions involved expect to commit up to USD 850 million in financial resources over a 2- 3 year period starting in 2010. Recognizing overlapping mandates in the Caribbean region, activity by individual institutions will follow existing geographical remits.
Notes to the editor:
The Caribbean Development Bank (CDB) has been financing social and economic development in the Caribbean for the past four decades, with cumulative approvals amounting to USD3.5 billion. With the goal of systematically reducing poverty in the Caribbean, CDB seeks to be a catalyst for development resources into the region.
European Investment Bank
For more than three decades, European Investment Bank, the European Union’s financing institution has supported economic development of the Caribbean region with loans and equity investment worth over EUR 1.3 billion. EIB lending in the Caribbean for the period 2004-2009 represented EUR 318 m, including overseas territories. Infrastructure projects include water, energy, telecommunications and transports sectors, financial services and support for small and medium-sized enterprises, including microfinance, and industry. The Bank’s Caribbean presence was reinforced in May 2007 by a Regional Office in Martinique.
The Netherlands Development Finance Company (FMO) is the international development bank of the Netherlands. FMO invests risk capital in companies and financial institutions in developing countries. With an investment portfolio of € 4.6 billion, FMO is one of the largest bilateral private sector development banks worldwide. Thanks in part to its relationship with the Dutch government, FMO is able to take risks which commercial financiers are not - or not yet - prepared to take. FMO's mission: to create flourishing enterprises, which can serve as engines of sustainable growth in their countries.
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing capital for private enterprise, and providing advisory and risk mitigation services to businesses and governments. Our new investments totalled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. In the past years, IFC has ramped up its investment and advisory operations in the Caribbean, with the support of donors and consistent with the governments' priorities. In two years, IFC has more than doubled the number of projects in this region, from 6 in FY07, to 15 projects in FY09, including investments and advisory services. To help address the challenges in the region and consistent with IFC's role and expertise, IFC has identified three key areas that are now at the center of its strategy in the Caribbean: infrastructure development, the financial sector and tourism.
PROPARCO is a Development Financial Institution partly held by Agence Française de Développement (AFD) and private shareholders from the North and South. PROPARCO’s mission is to be a catalyst for private investment in developing countries which targets growth, sustainable development and reaching the Millennium Development Goals (MDGs). PROPARCO finances operations which are economically viable, socially equitable, environmentally sustainable and financially profitable. Its sectoral strategy is tailored to the level of a country’s development and focuses on the productive sector, financial systems, infrastructure and equity investment. PROPARCO invests in a geographical area ranging from major emerging countries to the poorest countries, in particular in Africa, and has high-level requirements in terms of Social and Environmental Responsibility. PROPARCO has a wide range of financial instruments to meet the specific needs of private investors in developing countries (loans, equity, guarantees and financial engineering). PROPARCO has a team of 130 people, eleven regional offices and is supported by 50 AFD Group agencies worldwide. In 2009 PROPARCO granted €1, 1 billion for over eighty projects in more than thirty countries.