NASSAU, Bahamas, Jun 2, CMC – The Barbados-based Caribbean Development Bank (CDB) has approved the advancement of a landmark First-Loss Portfolio Credit Guarantee with the government of Canada.
Canadian Prime Minister, Mark Carney, had announced the initiative at the last G7 Leaders’ Summit in June last year and the CDB said that the US$200 million guarantee will significantly strengthen the bank’s ability to deliver development financing across the Caribbean.
The approval of the transaction was made by the CDB’s Board of Directors at the ongoing 56th annual meeting and represents a major step forward in innovative development finance, as the guarantee will allow CDB to reduce its portfolio risk, to enhance its capital position, and to expand its lending capacity.
The CDB said that the guarantee is expected to generate up to US$400 million in additional financing capacity, supporting investments in climate resilience, sustainable infrastructure, and economic development.
“This is an important step towards the agreement that will enhance our ability to deliver on our mandate at a critical time for the Caribbean,” said CDB President, Daniel M. Best, describing the initiative as a transformational milestone.
“It allows us to increase investment in resilience, opportunity, and economic development while safeguarding the Bank’s financial strength.”
The guarantee builds on CDB’s ongoing balance sheet optimisation efforts and aligns with global efforts led by the G20 to strengthen multilateral development banks and scale development impact.
Director, International Financial Institutions Division for Global Affairs Canada, Philippe Hall, said the support of the government of Canada “underscores its commitment to support reforms and innovations among Multilateral Development Banks for advancing sustainable development and strengthening resilience in Caribbean Small Island Developing States”.
The CDB said with the expected increase in its financing capacity, it will prioritise projects that advance climate action, regional integration, and economic development, consistent with CDB’s Strategic Plan.
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