Governments, organisations and companies within the region are increasingly seeking financing for sustainable and climate resilient infrastructure, according to Adam Carter, managing director and head of investment banking, foreign exchange and derivatives, CIBC FirstCaribbean, who explained the increased demand is within the hundreds of millions.
Speaking as a panellist at the 7th Annual Caribbean Infrastructure Forum (CARIF), Carter said the increase is driven by Caribbean country’s need to become better prepared to mitigate climate disasters.
“We’re seeing an increase in governments, particularly, looking to access Blue financing, and we’ve seen a massive increase in renewable energy applications, resilient project applications, utilities looking to be more resilient, hospitals looking to do upgrades, roads, cruise ports, just across the board we’re seeing the increase,” Carter said.
“It’s certainly in the hundreds of millions over the last few years where sustainable was not the theme. Resilience was always a theme in the Caribbean. But now we’re seeing resiliency fit under sustainability, which I think is more fitting. So, under that umbrella or title, we’re seeing a markable increase in appetite for projects that fit those criteria. We’re in a hurricane impacted region so this includes designing for category three, four or five is now the thing where you kind of have no other choice but to.”
Carter explained that funding for such projects, at a time where the world’s focus is now on supporting measures that protect the environment and address climate change, is available.
“The funding is generally there,” he said. “Financing is absolutely available. It’s prudent to get the right projects in place with the right parameters and frameworks. Once those are established and you’ve got the political and community buy-in, lenders and financial institutions are ready to go.”
Therese Turner-Jones, Caribbean Development Bank (CDB) director of projects, said though the demand for funding exceeds the supply of capital for all of the countries with those needs, there are multilateral partners that provide financing support such as the World Bank and Inter-American Development Bank (IDB).
However, she added there is a need for more countries to get a better grasp of their exact needs.
“First of all, I think there’s a bit of a deficit in countries recognizing what they need,” Turner-Jones explained.
“Because of how fast the external environment is changing, not just in terms of availability of finance, but also climate change and how the world is changing we can’t expect that our member countries are always up to date. But this is why we’re here. To provide those advisory services to help them do the technical work. This is not to say that the capacity doesn’t exist in-country, but to say that multi-lateral banks are in a better position to offer that advice. So, what I say to clients is to come to the MDBs first.”
Turner-Jones continued: “Explore the options with CDB, the IDC, the World Bank first. Because firstly, that money is cheaper and it always comes with technical assistance. They just need to ask. I would say that because we’re at such a critical juncture in terms of the needs of the region, we need to now think about what resilience means. You heard about renewable energy projects being important, roads and whether they’d be able to sustain a significant amount of rainfall, hurricanes, etc. So, there’s a lot of new information out in the infrastructure domain that the Multilateral development Banks (MDB) have at their fingertips, that the countries may not have. It’s best to work with us [MDBs].”
This year’s CARIF conference gathered some of the region’s leaders in policy, finance, infrastructural development for two days of solution-building and networking. Government ministers and industry leaders from both the public and private sectors were panellists covering a wide range of topics, centred around infrastructural development to meet the region’s needs.
CARIF 2023 took place at the Ritz-Carlton in Miami, Florida, September 18 -19, 2023, and was sponsored by CIBC FirstCaribbean and KPMG.