Press Release No. 24/121

Jamaica, International Financial Institutions, Donors Collaborate on Establishing a Programmatic Approach to Finance Climate Needs

April 17, 2024

The Government of Jamaica (GOJ), the Development Bank of Jamaica, the Green Climate Fund (GCF), Inter-American Development Bank (IDB), the World Bank Group, European Investment Bank as part of Team Europe, USAID, and the United Kingdom, are discussing a framework to establish a ‘Blue Green Facility’ –a blended financing structure–of up to USD 500 million over five years, which would include a contribution from the Government of Jamaica. Such a programmatic approach will help catalyze climate finance by introducing systematic, coherent, and scalable approaches towards adaptation and mitigation needs.

This support takes place in the context of the US$764 million Resilience and Sustainability Facility (RSF) arrangement approved by the International Monetary Fund (IMF)’s Executive Board in March 2023. Further to the October 11, 2023 press release of the GOJ ( here ), following the conclusion of Jamaica’s second review of the Resilience and Sustainability Facility (RSF) arrangement by the IMF Executive Board on February 28, 2024, the International Monetary Fund has disbursed an additional SDR191.45 million (about US$254 million). The authorities continue to make swift progress in their ambitious climate policy agenda under the RSF to increase resilience to climate change and catalyze climate financing. Recent reforms include steps to establish a national natural disaster reserve fund, strengthen climate-related elements in public investment management, and enhance the climate risks assessment in the financial system to embed these risks into supervisory activities. These reforms have built on steps taken in early 2023 to strengthen the natural disaster risk financing policy, the policy framework for Public-Private Partnerships, the electric vehicle policy, and the guidelines for energy efficiency in public buildings.

The accreditation of the Development Bank of Jamaica (DBJ) by GCF in July 2023 as a direct access entity and the execution of the Accreditation Master Agreement (AMA) on February 21, 2024 will allow DBJ to access GCF funding and implement large size climate projects or programs of over US$250 million.

The DBJ, GCF, IDB, the World Bank Group (World Bank, IFC, and MIGA), EIB, USAID, and the UK (FCDO) are discussing the modalities of establishing a Blue Green Facility of a potential size of US$500 million over five years, that would include a contribution from The Government of Jamaica from its budget. Financing modalities of the Facility will include a flexible combination of grants, concessional debt, guarantees, and equity instruments to leverage blended finance and crowd-in private investment for climate action within the micro, small and medium enterprises (MSME) ecosystem as well as support government’s adaptation and mitigation actions aimed at strengthening the resilience of local communities engaged in combatting the climate crisis.

The DBJ, Ministry of Finance & the Public Service (MOFPS), and IDB are also currently in the process of satisfying all the conditions of the technical cooperation agreement for the operationalization of the project preparation facility signed in November 2023. This is expected to be completed by May 2024.

The shift towards a programmatic approach forms a core component of the Jamaica country trial delivered with UK support through the Taskforce on Access to Climate Finance.  An upstream climate resilience investment framework, including systemic climate risk assessment and identification of a prioritized pipeline of projects for the Blue Green Facility is being supported by the Caribbean Community Centre on Climate Change and the University of Oxford with up to £1m in funding from the UK through support for the Coalition on Climate Resilient Investment. 

Quote:

Nigel Clarke, Minister of Finance and the Public Service of Jamaica, said “We are pleased to be leveraging Jamaica’s participation in the IMF’s Resilience and Sustainability Trust program to crowd-in further financing for climate smart development. The progress announced today is in keeping with the efforts of the GOJ, working with our multilateral and bilateral partners, to mobilize the blended financing required for sustainable infrastructure investment. This Blue Green and Project Preparation facilities will be particularly catalytic, and when operational, will enable an accelerated pace of development.”