The Inter-American Development Bank (IDB), the leading source of long-term lending for Latin America and the Caribbean, last week announced its intention to increase its financing for renewable energy and climate-related projects to $3 billion a year by 2012.
IDB President Luis Alberto Moreno made the announcement at a summit of energy ministers of the Americas held at the Bank’s headquarters in Washington, D.C. Representatives from 32 Western Hemisphere countries attended the event, including U.S. Energy Secretary Steven Chu and Secretary of State Hillary R. Clinton.
At the opening ceremony of the two-day event, Moreno said the IDB faces a surging demand for support from Latin American and Caribbean countries interested in developing their renewable energy resources and in combating the effects of climate change. IDB lending for energy-related projects is likely to reach $1.5 billion this year, up from $457million approved in 2008.
“Last month, as many of you know, our Board of Governors approved in principle a record general capital increase for the IDB of $70 billion. As a result, when this process is concluded, the Bank will have the capacity to double its clean and sustainable energy lending again, to approximately $3 billion a year, by 2012. And I am pleased to announce today that this is our intention,” Moreno said.
The expanded lending will allow the IDB to focus on four broad areas: stepping up renewable energy investments in its poorest member countries; fostering energy integration throughout Latin America and the Caribbean; promoting energy efficiency measures across the region and helping governments establish climate change mitigation and adaptation frameworks.
As an example of the sort of projects the IDB intends to pursue, Moreno said the Bank would propose to the Haitian government the development of a new energy infrastructure to harness Haiti’s wind, solar and hydroelectric potential. Such an initiative could cost as much as $1 billion, but would help the poorest country in the Western Hemisphere save hundreds of millions of dollars a year in fossil fuel imports.
“Of course, $1 billion is a lot of money. And many technical and regulatory obstacles would have to be overcome. But imagine what it would mean to Haiti to reduce its burden from fuel imports. Furthermore, this would prove that renewable energy isn’t a luxury, but rather a smart way of unleashing human potential in even the most difficult of settings,” Moreno said.
In addition, Moreno said the IDB is teaming up with the U.S. Department of Energy and other agencies inside and outside the region to establish the Energy Partnership for the Americas Innovation Center, which will be staffed by some of the world’s leading experts in renewable energy and energy efficiency. The center will serve as a clearing house for knowledge and an incubator for energy projects backed by governments and private sector investors.
“Dozens of countries from across the Americas have come together today to promote a clean energy for the future of our hemisphere,” said Secretary Chu. “By expanding our cooperation and collaboration on key energy and climate issues we will lay a foundation for broad-based economic growth while helping to protect our environment,”
During the ministerial meeting, at the headquarters of the Organization of the American States, delegates will discuss concrete proposals to find new sources of renewable energy, lower energy consumption and reduce carbon dioxide emissions.
Founded in 1959, the IDB is the world’s largest and oldest regional development bank. In March its 48 member countries agreed in principle to increase its capital resources to boost its lending capacity to $12 billion a year, nearly double its present sustainable level. The United States is the single biggest shareholder, with a 30 percent stake in the IDB’s capital. Collectively, Latin American and Caribbean borrowing member countries own a controlling majority of shares.
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