The United Kingdom (UK) has joined IDB Invest, a member of the Inter-American Development Bank Group (IDB Group) focused on development through the private sector, in a move designed to boost the UK’s work reducing poverty and tackling climate change across Latin America and the Caribbean through support for small and medium sized businesses.
Development Minister, Andrew Mitchell was joined by IDB President Ilan Goldfajn and IDB Invest CEO James Scriven in London to complete the UK’s membership of the group that provides almost £5billion of annual finance to businesses across the region.
Membership will ensure the UK can influence investments that the institution makes annually across the region and promote the UK’s development objectives through the work of the Bank.
“Joining IDB Invest will help us promote private sector investment, alleviate poverty and tackle climate change in a region experiencing its most severe effects,” Mitchell said.
The UK and IDB Invest will build on their existing partnership through the UK Sustainable Infrastructure Programme (UKSIP), which supports Mexico, Colombia, Peru and Brazil reduce their emissions and transition to sustainable infrastructure.
The UKSIP support for IDB Invest projects is expected to raise over £150million in private finance for the development of two solar power plants and the purchase of 400 electric buses.
The solar plants will produce around 440GWh per year, the equivalent power required for 230,000 homes in Colombia. While green electric buses are expected to save an estimated 500,000 tonnes of carbon dioxide over their lifetime – the equivalent to taking 100,000 cars off the road for a year.
In the last decade, IDB Invest has listed over £5billion in bonds on the London Stock Exchange. This demonstrates the strength of its partnership with the City and London’s role as the leading hub globally for green finance – ranked first in the world, for a third consecutive time, according to the Global Green Finance Index.
Investment in the Caribbean
Last year, British International Investment, the UK’s own development finance institution, made its first investment in the Caribbean for over twenty years, investing alongside IDB Invest and local partners with the aim to deliver thousands of jobs and support productive, sustainable and inclusive economic growth across the region.
During their meeting, Mitchell and Goldfajn agreed on the critical role of the Bank Group in increasing global climate ambitions. The minister set out the UK’s commitment to international investment in green businesses, stressing its importance in addressing the strategic vulnerability of climate change.
The UK’s International Development Strategy also outlines its commitment to help countries strengthen their energy security and provide affordable, reliable, and clean energy for all, employing the full development finance toolkit, including British International Investment.
This put the UK’s strengths – its capital markets, innovation, and expertise in science and technology to work in mobilising more private finance to advance climate and nature goals.