Three development banks have launched a program to help Caribbean countries reduce their debt in exchange for commitments to invest in climate and disaster resilience projects.
The Inter-American Development Bank, CAF and the Caribbean Development Bank will work together to prepare the so-called debt-for-resilience deals for countries in the Caribbean, and aim to bring more multilateral lenders as well as the private sector to participate, the banks said Thursday.
The three institutions will establish the guarantee term, define taxonomy policies and KPIs for each transaction, the IDB said in a news release.
“Each debt swap transaction should include a regional public-goods component, reinforcing collective resilience across the Caribbean,” IDB said.
The Bahamas completed a debt-for-nature swap transaction with The Nature Conservancy in November last year, while Barbados carried out swaps with the same US-based organization in 2022 and 2024. The IDB provided guarantees on all three transactions.
Ecuador, El Salvador and Belize have also carried similar nature swap deals.