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Environmental Finance Recognizes IDB’s Financial Transactions in Barbados and Uruguay

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Leveraging additional finance to support the sustainability goals is crucial to address the financial gap for climate and biodiversity challenges in Latin America and the Caribbean. The Inter-American Development Bank is committed to supporting its member countries in achieving their ambitions under the Paris Agreement and the Montreal-Kunming Global Biodiversity Framework, and structuring innovative financial mechanisms is fundamental to ensuring that national plans are funded.

In this sense, the Bridgetown Initiative is fostering the need for a reform of the financial system so as to increase access to concessional lending for developing countries, create a new facility to accelerate private low-carbon investment and enhance adaptation finance by expanding resources and by normalizing the inclusion of disaster and pandemic clauses in all lending instruments.

The IDB is a recognized leader in the development of the Sustainable Finance Capital Markets of Latin America and the Caribbean, and a global key player, supporting growth, transparency, efficiency, and fairness of these nascent markets. Since 2016, the IDB has developed a holistic advisory program that has supported 14 public sector issuers (of which 5 are sovereigns) to access the opportunities offered by the Sustainable Finance Market – issuing labeled bonds for a total of USD 35 billion, accounting for more than 25% of the overall regional market. At the same time, with a coalition of partners, IDB has developed the Green Bond Transparency Platform, collecting impact reports and indicators from more than 200 bonds issued in LAC to date, fostering transparency and confidence in this nascent market.

Last year, two transactions took place, which have been recognized internationally by both financial and environmental peers as groundbreaking transactions. Both are now serving as models for other countries, and the IDB is seeing increased demand for these products. Using IDB’s financial products, such as policy-based guarantees in new ways, to support countries in their development pathways is vital to optimizing MDB balance sheets and modernizing the international financial system. We hope to see many more similar transactions.

The Case of Barbados: A Debt for Nature Transaction is Elevating the Game

In September 2022, the Government of Barbados structured a Debt for Nature transaction, supporting a marine conservation agenda that intends to protect up to 30% of Barbados’ ocean, build ocean governance, and capitalize a new conservation trust fund. By valuing and building a strong blue economy agenda, the Government of Barbados was able to manage sustainably its debt, as they repurchased USD 77.6 million of international debt for 6.625% 2029 Eurobond at a price of 92.25 cents on the dollar and USD 72.9 million (BBD 145.8 million) of 8% Domestic Bond Series E at par. The IDB supported the transaction with a guarantee of USD 100M, which included the hurricane and pandemic clauses and a policy matrix with triggers that reinforced financial and policy changes by both the Ministry of Finance as well as the Ministry of Environment and National Beautification, including the creation of the Barbados Environmental Sustainability Fund (BESF), blue economy governance, sustainable debt management strategy, etc. The Nature Conservancy was a partner in this process, with a USD 50M guarantee.

For the next steps, Barbados is receiving the support of the Bank through technical assistance that is building out the components of the Marine Spatial Planning (MSP) process that underpins the conservation commitments, and that will support a draft of the Ocean Policy. 

The Case of Uruguay: An Innovative Financial Instrument is Raising the Countries Ambition

In October 2022, Uruguay issued a pioneer finance instrument: the first sovereign sustainability-linked bond in the world to include a step-down mechanism that is activated upon the achievement of environmental targets tied to the country’s nationally determined contribution (NDC) to the Paris Agreement. The IDB worked with Uruguay’s Ministry of Economy and Finance (MEF) in preparing the framework for this bond, which is a clear indication of the MEF’s determination to align the country’s sovereign debt policy with its climate goals.

The issuance attracted 188 investors from Europe, Asia, the United States, and Latin America, of whom 21% are new holders of Uruguayan debt. The total demand for the bond was USD 3.96 billion, greatly exceeding the USD 1.5 billion Uruguay decided to issue.

This bond issuance is the product of a substantial multidisciplinary and inter-ministry effort and reflects the country’s ongoing commitment to multi-sector work on climate action, which we have proudly supported throughout the years. 

It is key to underline that the success of these cutting-edge transactions will also rely on the long-run impact and achievement of the milestones under which the Governments have committed to attain under their sustainability agendas. In this context, governance will play a key role in building the capacity of the national stakeholders within the government and civil society. This will enable the possibility to replicate these transactions as well as increase their ambition over time.

Further reading: the IDB recognized in Environmental Finance:


Jennifer Doherty-Bigara

Jennifer Doherty-Bigara is a policy advisor and climate change specialist at the Inter-American Development Bank, based in the country office of Barbados. With over ten years of experience in the sustainability agenda, she has mainly focused on climate governance and national and local climate change policies (NDCs, LTS, SDGs), fiscal policy and green budgeting, climate finance and long-term planning exercises with an adaptation approach. Jennifer has gained analytical and operational knowledge advising governments through the coordination of the NDC Invest Platform and afterwards mainstreaming climate change considerations in the IDB portfolio of Argentina, Chile, Paraguay and Uruguay, ensuring the design and implementation of sustainable development projects. She also gained key insights as an external appointee in the Agence Française de Developpement (AFD), coordination the efforts of the Adapt ‘Action Platform in the Gulf of Guinea and the Indian Ocean. She has also worked on climate finance and coordinated fundraising efforts as part of the SECCI Funds, ACL, PROADAPT, and bilateral donations. Jennifer holds a master´s in International Development Policy from the McCourt School of Public Policy (MSPP), University of Georgetown and a Master’s in International Affairs from Sciences Po Toulouse. Follow Jennifer on Twitter: @jdohertybigara @jdohertybigara

Gregory Watson

Gregory Watson leads the IDB's Natural Capital Lab program, funded by the French and UK governments. It works with the IDB Group and partners to drive innovation in financing natural capital and promote the incorporation of biodiversity. It incubates, accelerates and scales new solutions to pressing environmental problems, looking to nature as an asset. Previously, Greg worked at the IDB Lab, where he led the IDB's first equity investment in oceans, an equity investment in a silvopastoral system in Macaúba, developed the first Habitat Bank in Latin America and the Caribbean, supported an asset class for of natural capital and the US$20 million Climate Fund Investment Project for Forests. He also created the EcoMicro green microfinance program, conceptualized Climatescopio and the world's first private sector FIP project in Mexico. Mr. Watson holds a master's degree from the Fletcher School of Law and Diplomacy and a bachelor's degree from Tufts University.

Federico Brusa

Federico is a climate policy specialist who specializes in the economic and planning dimensions of climate change. He is currently working with the ministries of finance and planning to assist them in fully understanding and embracing the Paris Agreement as well as its implications for sustainable development. To do so, multisectoral approaches that incorporate the planning and environmental dimensions must be conceived. Federico has worked on climate policy and development, in New York and Washington, as well as in Colombia, Venezuela, Mali, Chad, the CAR, the DRC, Niger, the Ivory Coast, and Afghanistan. Federico currently works for the climate change and sustainability division of the IDB, covering Argentina, Uruguay, Chile, and Paraguay. He has also conducted research on climate policy at the Earth Institute (Columbia University) where he taught public policy as well as international relations. Federico has worked and conducted research to contribute to the U.N. Secretary General’s Strategy for the Sahel, helping establish the links between security, governance and climate change. He has also advised the U.N. Security Council and its presidency on these links. His other professional interests include complex systems and their application on climate adaptation governance frameworks, as well as the use of ICTs for decision-making. Federico holds an MPA from the University of Columbia, with a concentration in International Finance and Economic Policy. He is a dual citizen of France and Argentina.

Gianleo Frisari

Gianleo is a climate change economist at the InterAmerican Development Bank (IADB) where he focuses on climate finance and sustainable investments research to identify solutions for the mobilization of private capital. He works on financial instruments for the public sector, such as sovereign green bonds, sustainable solutions for Public-Private Partnerships, and the integration of climate change considerations in financial regulation and supervision. Before joining IDB, Gianleo was a senior analyst at the Climate Policy Initiative, working on risk mitigation and blended finance instruments low carbon investments. Before focusing on climate finance issues, Gianleo was a portfolio manager of investment programs dedicated to hedge funds and alternative assets. Gianleo holds a Ph.D. in “Science and Management of Climate Change” from Ca’ Foscari University of Venice and graduated in Economics from Bocconi University in Milan.

Joan Oriol Prats

Joan Oriol Prats is the Principal Financial Specialist in the Connectivity, Markets and Finance Division at the Inter-American Development Bank. He has more than 15 years’ experience in capital markets and sovereign risk management. He leads the sovereign guarantee practice, where he has led the first’s structures for debt for nature conversions, sovereign social bonds and blue bonds. He also serves as the Executive Secretary of the LAC Debt Management Group. Before the IDB, he worked in the public administration in Spain and the academia. He has a BA in Economics and a Ph.D. in Political Science from the Autonomous University of Barcelona and a MBA from ESADE Business School.

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