UK, IDB strengthen partnership for development in Latin America and the Caribbean

Dec 16, 2024 News

---

Kaieteur News- The United Kingdom (UK) last week reaffirmed its commitment to advancing sustainable development in Latin America and the Caribbean by announcing that it will provide a robust support package to the Inter-American Development Bank (IDB).

UK Secretary of State for Foreign, Commonwealth, and Development Affairs David Lammy and IDB President Ilan Goldfajn made the announcement during a meeting in Bridgetown, Barbados, the IDB said in a press release. The package includes support for IDB Invest’s pioneering “Originate to Share” business model as well as plans to invest up to £80 million ($100 million) in its capital increase, with the potential of a fivefold increase in the UK’s share in the institution’s capital. This contribution reflects the UK’s confidence in IDB Invest and its track record of working with the UK to maximize private-sector-led development in the region.

The UK has also signaled its support for the replenishment of IDB Lab, the IDB’s innovation laboratory and venture capital arm.   In addition, the UK is offering up to £15 million ($19 million) to fund targeted initiatives in the Caribbean. The UK is providing support targeted especially to Caribbean countries. This includes £5 million ($6.3 million) to support the ONE Caribbean Multidonor Trust Fund, which provides a strategic framework for improving climate adaptation and resilience, citizen security, private-sector engagement, and food security. The fund promotes regional cooperation and aims to maximize resources, strengthen the capacity of both the public and private sectors to tackle development challenges, and leverage economies of scale. The fund directly benefits Barbados, Belize, Guyana, Jamaica, Suriname, The Bahamas, and Trinidad and Tobago.

In addition, the UK is providing up to £10 million ($12.7 million) to support COMPETE CARIBBEAN+, a new program that aims to foster sustainable economic growth while increasing the competitiveness of Caribbean companies. It also aims to promote climate action and gender equality by sharing best practices and the latest development research with both private and public-sector actors. The program specifically aims to benefit vulnerable communities in small island nations.

“The United Kingdom has been a steadfast partner in supporting the IDB’s work in addressing some of the pressing challenges in Latin America and the Caribbean. Together, we are advancing citizen security, bolstering climate resilience, and creating economic opportunities to improve lives and strengthen communities across the region,” said IDB President Ilan Goldfajn.

“As the son of Guyanese parents, I am living proof of the ties the UK shares with the Caribbean. Building our ties with these fast-growing economies in the region will make the UK and the Caribbean safer, stronger, more prosperous and more resilient against the climate crisis,” added UK Secretary of State for Foreign, Commonwealth, and Development Affairs David Lammy at the Regional Security and Justice Summit in Bridgetown, Barbados.

These contributions from the UK come in addition to the UK Sustainable Infrastructure Program, or UKSIP, which was launched in 2017 and is a flagship partnership between the IDB and the UK’s Foreign, Commonwealth & Development Office. The program showcases the power of blended finance and public-private synergies.

Through the program, the UK uses concessional financing to support blended finance initiatives that enable IDB Invest to reduce funding costs for specific projects. This is complemented by technical assistance from IDB operations, which addresses regulatory and institutional reforms to improve the operating environment for businesses. Together, these elements ensure long-term project sustainability and maximize development impact. Now in Phase II, UKSIP recycles reflows from Phase I projects to expand the program’s scope to climate adaptation, resilience, and nature-based solutions while its reach beyond Mexico, Brazil, Colombia, and Peru to include small and island countries in the Caribbean basin and Central America. With potential UK contributions of up to £66 million ($84 million) by 2029, including £17 million ($21.6 million) already available this year for Blended Finance operations, UKSIP’s total funding could reach £177.5 million ($223.5 million).

(UK, IDB strengthen partnership for development in Latin America and the Caribbean)

(UK, IDB strengthen partnership)

---

• £5 million ($6.3 million), and Development Affairs David Lammy, Commonwealth, IDB, Latin America

---