US$383M replenishment for CDB fund to reduce poverty, inequality in Caribbean
“A key concern for the Special Development Fund over this cycle will be the need to respond meaningfully to the challenges of poor and vulnerable groups whose conditions have been made worse by the Covid-19 pandemic. The priority will be a focus on developing social resilience by building the capacity of individuals, communities and countries so that they are prepared for shocks, and can cope when they do occur.” – CDB President Dr Wm Warren Smith said.
(Caribbean Development Bank Press Release) The Caribbean Development Bank’s (CDB) Board of Directors today endorsed a US$383M programme for the 10th cycle of the Bank’s Special Development Fund (SDF), the programme devised to reduce poverty and inequality and transform the lives of citizens in its Borrowing Member Countries (BMCs).
The SDF represents the principal pool of concessional resources available to the Bank to assist BMCs in addressing poverty, sustainable development, governance, capacity development, gender inequalities, environmental sustainability, climate change, disaster risk management, and regional cooperation and integration.
Established in 1970, the Fund is a unique partnership among the Bank’s stakeholders with both borrowing and non-borrowing members contributing to its resources. With support from CDB and other development partners, the BMCs have been making consistent efforts over the past two decades to reduce poverty and inequality.
However, pressing development challenges persist and the ongoing Covid-19 pandemic has undermined some of the socio-economic gains achieved.
“A key concern for the Special Development Fund over this cycle will be the need to respond meaningfully to the challenges of poor and vulnerable groups whose conditions have been made worse by the Covid-19 pandemic. The priority will be a focus on developing social resilience by building the capacity of individuals, communities and countries so that they are prepared for shocks, and can cope when they do occur,” CDB President Dr Wm Warren Smith said.
Member countries have pledged to contribute US$188.2 million to the SDF for the period 2020-2024 while the Bank has allocated US$162.8 million from internal resources, such as loan repayments. The remaining gap in the programme funding of US$32 million is expected to be provided by existing and prospective contributors. About two-thirds of the Fund will be used for concessional loans to BMCs with the remainder allocated to grants.
The top five contributors to SDF 10 are: Canada (C$81.4 million / US$59.6 million), United Kingdom (£21 million / US$26.5 million), Germany (€12.4 million / US$13.7 million), Jamaica (US$13 million) and Trinidad and Tobago (US$11.3 million).
“The impact of Covid-19 has put tremendous stress on social protection systems that were already challenged to respond to the needs of the poor and vulnerable. The Bank welcomes the sustained commitment of the Contributors to the Special Development Fund. Through this solid partnership, CDB can continue to lift people out of poverty and support countries in the recovery phase,” Smith said.
To tackle the fall-out of the pandemic and make further development gains, the overarching goal of SDF 10 is to assist BMCs to reduce poverty and inequality, and to transform the lives of BMC citizens consistent with the Sustainable Development Goals.
The strategic direction of the Fund is built on three pillars, namely:
· social resilience and leaving no-one behind, which includes social infrastructure, education and training, initiatives geared toward capacity-building, youth development, agriculture, rural development, water, and sanitation;
· economic resilience for inclusive growth, which encourages the expansion of climate-resilient economic infrastructure; private sector development, including micro, small and medium-sized enterprises, and blue economy initiatives, and;
· environmental resilience, which encompasses environmental management, climate adaptation and mitigation, disaster risk management and promoting sustainable energy solutions. Four cross-cutting themes, namely gender equality, good governance, digitalisation, and regional cooperation and integration run through these pillars.
About the Caribbean Development Bank
The Caribbean Development Bank is a regional financial institution established in 1970 for the purpose of contributing to the harmonious economic growth and development of its Borrowing Member Countries (BMCs). In addition to the 19 BMCs, CDB’s membership includes four regional, non-borrowing members (Brazil, Colombia, Mexico and Venezuela) and five non-regional, non-borrowing members (Canada, China, Germany, Italy, and the United Kingdom). CDB’s total assets as at December 31, 2019 stood at US$3.59 billion (bn). These include US$2.10 bn of Ordinary Capital Resources and US$1.49 bn of Special Funds Resources. The Bank is rated Aa1 Stable by Moody’s, AA+ Stable by Standard & Poor’s, and AA+ Negative by Fitch Ratings. Read more at caribank.org.