This project is implemented within the framework of the Green Climate Fund’s Readiness and Prepatory Support Programme in coordination with the Ministry of Environment and Natural Resources.

GGGI supports this effort by catalyzing access to green investments, strengthening policy, planning, and regulatory frameworks, and building institutional capacity to tackle critical challenges, including high climate vulnerability, limited access to long-term affordable finance for low-carbon projects, and the gap between education and the green job market.

The program promotes sustainable energy, resilient infrastructure, and green job creation, ultimately contributing to the Dominican Republic’s sustainable, low-carbon, and climate-resilient development goals.

The project seeks to strengthen institutional capacity, strategic frameworks, and project portfolios to mobilize climate finance and attract private investments, advancing the country’s climate objectives.

It will enhance the capacity of the government of the Dominican Republic to raise climate finance, while the National Designated Authority (NDA) and candidate Direct Access Entities will build their institutional capacity. Local financing institutions will improve their resilience against environmental risks. Additionally, the Ministries of Labor, Finance, Tourism, and Economy will improve their strategies and frameworks to support green initiatives.

In its updated NDC submitted to the UNFCCC, the Government of the Dominican Republic commits to cut emissions by 27% by 2030. The achievement of this target is heavily dependent on external finance from development partners and developed economies. The country’s unconditional GHG emission reduction target is just 7%, with the remaining 20% reduction being conditional on external financing.

The significant investments and efforts required for the Dominican Republic to adapt to and mitigate the impacts of climate change risk being hampered by the impact of the COVID-pandemic which hit the country after a prolonged period of high debt-financed public infrastructure investments, deteriorating the country’s economic outlook and leaving little fiscal and policy space to pursue priority climate change adaptation and mitigation initiatives.

Although international climate finance and ODA offer some relief to the country’s growing debt to GDP ratio, the decreasing level of international aid undermines the long-term sustainability of this approach, with the Dominican Republic’s net ODA decreasing by 68% between 2015 and 2018.

Reluctant to reduce its climate change ambitions, the Government of the Dominican Republic has embarked on an ambitious effort to increase the efficiency of its climate finance ecosystem by diversifying the country’s donor engagement, accessing underutilized climate funds and developing new and innovative finance mechanisms to de-risk mitigation and adaptation projects in an attempt to mobilize finance from the private sector to contribute an estimated 71% of the investments required to meet the country’s unconditional mitigation targets.

In June 2024, the Government of the Dominican Republic, through the Ministry of Finance, successfully issued its first sovereign sustainable bond. This is the first sovereign thematic bond between the Caribbean and Central America region. The bond’s proceeds will focus on projects related to transportation, clean energy, waste management, and more. With a 12-year maturity and an annual coupon of 6.6%, the bond’s financing cost was 15 basis points lower than conventional bonds. The transaction was six times oversubscribed, raising USD 750 million.

Within the thematic bond technical assistance program, over 60 banking executives have been trained in the issuance of thematic bonds. Additionally, three sustainable bond frameworks for local banks have been developed. 

In September 2024, BANFONDESA received approval from the Super intendency of Capital Markets to issue an USD 8.3 million sustainable bond. The proceeds from this bond will be used to finance green projects such as clean transportation, clean energy, and energy efficiency initiatives. Additionally, a portion of the funds will be allocated to social projects aimed at supporting SMEs and empowering women.

GGGI successfully implemented a survey for the study of ecotourism products and services, receiving over 60 responses. This data will be crucial in analyzing trends and opportunities within the national ecotourism market.