Saint Lucia, like many Small Island Developing States (SIDS) is vulnerable to the uncertain consequences of climate change. Funding climate related initiatives adds an additional financial burden on the economies of SIDS. While predominantly this finance has come in the form of grants and concessionary loans from development partners to finance climate change objectives, these options have been proven to be unsustainable as international public finance has decreased over recent years.
It is against this backdrop that the Department of Economic Development in the Ministry of Finance, Economic Development and Youth Economy, which functions as the National Designated Authority (NDA) to the Green Climate Fund (GCF), in partnership with the Saint Lucia Development Bank (SLDB) and the Global Green Growth Institute (GGGI), are implementing a project to support the achievement of Saint Lucia’s climate and development goals by accelerating the flow of climate financing to the country. The project, titled Mobilizing Climate Finance and Private Investments for Low-Carbon Development in Saint Lucia, is funded through a grant from the Green Climate Fund (GCF) Readiness and Preparatory Support Programme, totaling approximately USD $760,000.
The project activities contribute towards the implementation of Saint Lucia’s Nationally Determined Contribution Financing Strategy, which sets out a framework for how the country can raise the necessary financing to deliver on its intended climate action. The project aims to strengthen the Government of Saint Lucia’s institutional capacity, frameworks and project pipeline to enable the mobilization of international climate finance and private investment for low-carbon development in Saint Lucia. This initiative was approved in October 2021 and is set to be completed by mid-2023.
The key components of the project are to support the Government in exploring innovative financing options to access international climate finance, including sovereign green bonds and debt for climate swap transactions, support local financing institutions in greening the financial sector, design and structure public private partnerships and advance Saint Lucia’s flagship project on Green Affordable Housing for submission to the GCF.
As part of the project, a one-day capacity building workshop, facilitated by the Global Green Growth Institute (GGGI), was held on May 18th 2022 at the Coco Palm Resort in Rodney Bay. The workshop was aimed at sensitizing and building the capacity of government officials to understand and structure a green bond, compliant with international standards. Technical officers across various government ministries, agencies and partners were in attendance. Participants were provided with detailed guidance on the issuance of sovereign green bonds and engaged in an interactive exercise to explore the applicability of green bonds in the context of Saint Lucia.
Government partners and GGGI staff in attendance at the Green Bonds Capacity Building Workshop held on May 18th 2022.
“The goals set out in Saint Lucia’s Nationally Determined Contribution under the Paris Climate Agreement are conditional on international financing and are estimated to cost over USD $350 million, “said Mrs. Nadia Wells-Hyacinth GCF Focal Point “In order for us to meet these goals, it is critical that we explore using innovative financing mechanisms that minimize pressure on government budgets and reduce reliance on international public finance. This project will position us well to take advantage of these approaches to meet our goals.”
GGGI’s Caribbean Representative Dr. Kristin Deason commented, “This project showcases the Government of Saint Lucia’s leadership in exploring innovative approaches to accelerating achievement of its ambitious climate goals. GGGI is proud to be partnering with Saint Lucia on this initiative and looks forward to continuing to work closely with stakeholders from across the government and private sector to accelerate the flow of climate financing into the country.”
An upcoming webinar is planned for later in the year to raise awareness of the initiative and provide further details on its components and how it will contribute towards addressing Saint Lucia’s climate financing needs and broader climate objectives. Stay tuned to GGGI Caribbean’s Facebook and Twitter for information on registering for this webinar.