Access to fit-for-purpose funding is a critical need to catalyse Caribbean climate-resilient projects often considered high risk to private investors. Yet a commitment from concessional financiers may attract commercial financing, offering a blended solution. This approach is the foundation of the recently mobilised Caribbean Blended Finance for Resilience Fund, an initiative of the Caribbean Climate-Smart Accelerator working with the Island Resilience Action Challenge (IRAC).
The CCSA and IRAC have been developing the groundwork for the CBFR for the last two years. In 2021, the CCSA applied to the Caribbean Development Bank, a partner to the IRAC for “financing towards the cost of Consultancy Services” for the development of the fund. In November, CCSA CEO Racquel Moses reported to the media in a post-COP27 news conference that the CDB with the support of the government of Canada is financing the initial research phase of the project. Following completion of this phase marketing and fundraising activities for the fund will begin.
The Island Resilience Action Challenge was first convened at the Caribbean Renewable Energy Forum (CREF) in 2019, by Advanced Energy Group and New Energy Events. It is described as a “year-round initiative designed to build consensus around hurdles to grid resiliency on islands, identify actionable solutions – and then act on them.”
The CBFR Fund will be a regional blended financial instrument for sourcing impact investment, equity, mezzanine, debt and a risk mitigation window for climate-resilient projects with a focus on sustainable energy. This is in keeping with one of CCSA’s pillars of work to realise 90% renewable energy for the region by 2035.
