Volume 18 | October-December 2019
Foromic: “Reinventing Inclusion”

For two days after the EcoMicro event, participants had the chance to hear speakers from around Latin America and the Caribbean explore how digital solutions and new business models can expand economic growth and promote inclusion in the region.

“Reinventing Inclusion” was the theme of the IDB Lab’s premier annual event, called Foromic; the name is shorthand in Spanish for the Inter-American Forum for Microfinance. Held on October 31 and November 1 in Punta Cana, in the Dominican Republic, the event drew around 1,300 participants from more than 30 countries.

Many of the presentations focused on banking and technological innovation. Sample panel discussions: “The Opportunities of the Digital Payments Revolution”; “Harnessing Fintech for Financial Inclusion”; “Leadership of Women in Financial Innovation”; and “The Challenge of Financing Innovators.” Other topics ranged from renewable energy and urban mobility to agricultural technology (agtech) and the “blue economy,” which encompasses economic activities related to oceans and coastal areas.
In remarks opening the conference, IDB President Luis Alberto Moreno stressed the urgency of addressing the “deficit of opportunities” in the region and the need to create more prosperity and inclusion at a time of growing social unrest in several Latin American countries.

It was a point echoed at the close of the conference by James Scriven, CEO of the IDB Group’s private sector arm, IDB Invest. He cited Chile as an example of an economically advanced country that was nonetheless facing turmoil. “Not everyone in that country has the same opportunities,” he said, as he urged his audience to continue tackling the problem of inequality.

“Throughout the region, citizens are calling for better answers and more inclusion,” said the CEO of IDB Lab, Irene Arias Hoffman. Heeding that call effectively, she said, will require the combined efforts of the public and private sector—the “ecosystem of innovation in our countries,” as she put it—to come up with new models and new approaches to help close gaps and expand opportunities.
GCF: Driving the transformation to a climate-resilient financial system
Various actors within the financial sector need to respond to climate risks, especially central banks and the banking sector. As public resources alone are insufficient to the need for climate finance, both development banks and commercial banks have an integral role to play in directing finance glows to climate investments. However, they face several barriers, including: limited access to long-term finance; capacity constraints in implementing green investments; and the lack of an adequate regulatory framework to allow for a low-carbon transition.

In the publication, a series of case studies, grouped thematically, demonstrate the approach taken by the Green Climate Fund to green the financial system through engagement with a wide range of financial institutions, notably: central banks, commercial banks, non-banking financial institutions, development finance institutions, national development banks, microfinance institutions, cooperatives, and other green investment vehicles.

Themes include: the green on-lending model through local financial institutions; the risk sharing approach to mobilize private capital; and increasing access to finance for the most vulnerable micro-, small-, and medium-sized enterprises.

Read more here .
Latin America & Caribbean: Green finance state of the market 2019
Transitioning to a green and climate-resilient economy is crucial to ensure that LAC can reduce its GHG emissions, better hedge against climate risks and thrive in the long run. Green bonds could be an important instrument to support this transition.

Global green bond issuance started with multilateral development banks raising funds for climate-related projects in 2007/08. The first issuer from Latin America and the Caribbean (LAC) entered the market in 2014. LAC issuers have contributed 2% of global green bond issuance volume to date; 41% of this is from Brazil.

This report explores the progress that has been made and the opportunities for LAC countries. It looks at regional themes in green bond issuance as well as issuance from companies that operate in climate-aligned sectors and potential green bond issuance from public sector entities.

It also provides country-level overviews for Argentina, Brazil, Chile, Colombia, Mexico and Peru, as well as for Central America.

Read the full publication here .
Climate Resilience Principles: A framework for assessing climate resilience investments
Losses due to weather-related events have increased nearly ten-fold over the last 40 years, from a ten-year global average of US$12 billion in 1980 to US$119 billion today. To combat spiraling losses from climate impacts, an estimated US$200 billion globally will be required annually within twenty years. The accelerated deployment of various sources of finance, including green bonds, is urgently needed.

The Climate Resilience Principles document is therefore intended for a wide audience, including but not limited to bond issuers, investors and other stakeholders seeking guidance on: (i) the potential range and type of climate resilience investments; (ii) how to define and assess physical climate risks; and (iii) how to credibly demonstrate climate resilience outcomes.

Together, the Principles and sector-specific Criteria will support the mainstreaming of climate resilience considerations across all green bonds as well as improve transparency in the market for green bonds that aim to enhance resilience. 

Read the full publication here .
EcoMicro  partners with  Financial Institutions  to create Green Finance Products that build resilience of  Micro, Small and Medium Enterprises  (MSMEs) and  low-income households  to climate change. This is an innovative approach to developing products that  facilitates access to sustainable, low-cost energy or adaptation technologies  for MSMEs and low-income households.

EcoMicro is a Technical Cooperation Program by the IDB Lab, co-financed by Global Affairs Canada, IDB Lab and the Nordic Development Fund. The Global Affairs Canada contribution supports t he EcoMicro Caribbean Program .
Inter-American Development Bank | IDB Lab | (246) 627-8500 ecomicro@fomin.org | www.ecomicro.org