The President of the IDB and the Managing Director of the IMF Outline Enhanced Partnership to Better Support Latin American and Caribbean Countries
IMF News, July 22, 2024
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- The President of the IDB and the Managing Director of the IMF Outline Enhanced Partnership to Better Support Latin American and Caribbean Countries
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- Published: July 22, 2024
Overview and purpose
- Date: July 22, 2024
- Press Release No. 24/283
- Washington, DC – July 22, 2024: The President of the Inter-American Development Bank (IDB) and the Managing Director of the International Monetary Fund (IMF) have agreed to enhance their collaboration to better support the efforts of common members in Latin America and the Caribbean to foster sustainable and inclusive growth and address the structural challenges of climate change.
- Operating within the scope of each institution’s mandate, IDB and IMF staff will increase their cooperation in two main areas: general coordination and climate finance.
Enhanced general coordination (four focus topics)
- Staff will deepen cooperation on:
- (i) surveillance of macro-economic policies
- (ii) IMF arrangements, in particular the Resilience and Sustainability Fund (RSF)
- (iii) IDB lending operations, including investment and policy-based loans
- (iv) capacity development
Climate finance collaboration (three focus areas)
- The climate finance collaboration will focus on:
- i) identifying policies to support member countries’ climate objectives in the context of the RSF
- ii) capacity development to support the implementation of the RSF
- iii) building programmatic approaches to mobilize climate finance
- Expected outcomes:
- Enhanced support for designing economic policies and policy reform programs in common member countries
- More effective mobilization of climate finance, including working with country platforms to attract additional funding for climate action
- Recent climate finance roundtables convened in Barbados, Jamaica, and Costa Rica brought together authorities, development partners, and private investors to explore solutions to countries’ climate finance needs and provide faster and broader access to financing and capacity development.
Leadership statements
- Ilan Goldfajn, President of the Inter-American Development Bank: “Our enhanced partnership with the IMF is a very significant step towards better supporting our member countries tackle climate change more effectively and seizing the opportunities that the green transition can offer and foster sustainable growth. We see a lot of synergies between the work of both institutions, and I look forward to amplifying our impact thanks to this closer collaboration.”
- Kristalina Georgieva, IMF Managing Director: “We are committed to enhancing our collaboration with IDB to deliver tangible results for people, businesses and institutions throughout Latin America and the Caribbean. We do this by leveraging our respective expertise to tackle challenges posed by climate change.”
Demonstrated success — country examples
- Paraguay
- Joint work includes public financial management, revenue administration and mobilization, and governance.
- Collaboration broadened to include climate initiatives under the Resilience and Sustainability Facility (RSF) arrangement and the Policy Coordination Instrument (PCI).
- IDB support includes development of a green taxonomy, expansion of the country’s clean energy matrix, and waste management.
- IDB support to Ypacaraí Lake's sanitation project complements the RSF reform matrix and creates performance incentives for better water/wastewater management using IDB CLIMA, the IDB's results-based financial tool that incentivizes faster progress on adaptation and mitigation.
- IDB contribution to implementation of reforms under the PCI to enhance public financial management, including on public investment.
- Jamaica
- IDB–IMF partnership played a critical role in designing and implementing reforms under the RSF arrangement to incorporate climate adaptation and mitigation elements in fiscal management and to launch initiatives aiming at greening the financial sector.
- IDB provided extensive and timely capacity development, including:
- inclusion of climate requirements in public-private partnerships policy frameworks
- definition of a methodology to conduct climate impact assessments in public investment
- introduction of investment project selection criteria (including climate change elements)
- development of an electric vehicle policy
- new guidelines for energy efficiency in public buildings
- establishment of a framework for green-bond issuance
- Barbados
- Collaboration supported the design and implementation of the current RSF arrangement.
- IDB supported enhancement of the public financial management framework by integrating climate elements into the Procurement Act, including:
- designing and approving guidelines for a green procurement framework
- developing standard procurement contracts that incorporate climate change requirements
- implementing green budget tagging to inform policymakers and the public about the quantity and use of on-budget climate finance
- IDB coordinated the design and execution of innovative financial instruments, such as the 2022 Debt-for-Nature conversion.
- Costa Rica
- Collaboration facilitated the successful completion of the RSF arrangement in June 2024.
- IMF contributed to prioritizing and sequencing of reform measures through convening power and macro policy expertise.
- IDB provided technical assistance to the Ministry of Finance and Ministry of Planning (MIDEPLAN) to meet RSF policy commitments in areas including:
- design of a new budget classification system that will allow for the estimation and evaluation of climate-related expenditures
- development of tools and guidelines to prioritize capital projects including a range of clime change criteria
- Costa Rican authorities are strengthening the legal and regulatory framework for public-private partnerships with support of IDB, an important step toward the establishment of a Project Preparation Facility to unlock private sector financing for climate investments.
Forward-looking cooperation and partnerships
- IDB and IMF staff will continue to partner in the design and implementation of policies and programs to support the structural transformation countries in the region need to reach their strategic climate goals.
- Future work will include exploring options to advance green fiscal policies and enhance financing alternatives for climate resilience investments through a combination of different financial tools.
- IDB and IMF staff are also working closely with the World Bank to support the ambitious climate reform agenda of other member countries.
Media contact
- IMF Communications Department
- MEDIA RELATIONS
- PRESS OFFICER: Julie Ziegler
- Phone: +1 202 623-7100
- Email: MEDIA@IMF.org
- @IMFSpokesperson
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