GCF Approves Project Preparation Facility Grant to Establish Barbados Green Bank

Caribbean’s first green bank will mobilise financing for climate resilient, low carbon initiatives in the region.

GCF Approves Project Preparation Facility Grant to Establish Barbados Green Bank

The Blue-Green Investment Corporation (BGIC), the first green bank in the Caribbean, was approved by the Green Climate Fund (GCF) to receive support from GCF’s Project Preparation Facility (PPF), a major step in the development of this initiative. The PPF provides financial and technical assistance to GCF Accredited Entities for the preparation of high potential project and programme funding proposals to be considered for approval by GCF. Pegasus Capital Advisors will be GCF’s Accredited Entity for the BGIC PPF and Funding Proposal.

This follows several discussions between GCF and the Government of Barbados on establishing a green bank, initially conceptualized by Barbados Prime Minister Mia Mottley to help Caribbean countries meet their targets for Nationally Determined Contributions and achieve a climate-resilient low-emission future. The aim is for BGIC to become a major institution for financing climate action in the region.

BGIC is a public-private sector initiative that aims to overcome the financing challenges and constraints of climate change adaptation and mitigation in the Caribbean region. Initially focused on Barbados, BGIC will finance several private and public initiatives for green, affordable, gender-inclusive housing, energy generation, water conservation, food security, and low-carbon transport. The financing vehicle will be able to target high-impact sectors by financing green bonds and other capital market instruments.

BGIC will strengthen financing capacity and infrastructure to draw in other financial players like banks, credit unions, pension funds, and insurance companies and will build awareness of a more resilient and sustainable Caribbean. These measures ultimately will promote a paradigm shift towards resilient livelihoods and low-carbon technologies, particularly for low-income households and energy, housing, agricultural, and transport sectors.

Professor Avinash Persaud, Special Envoy to the Prime Minister on Climate Finance, commented, “Barbados has chosen not to privatize the energy from the sun and wind but deliver access to all by right. The principal challenge in achieving this goal is more finance for the initial capital expenditure. The Blue-Green Investment Corp will fill this gap and others that are preventing the acceleration of investments in both climate mitigation and adaptation. We strongly commend and welcome the support of GCF, its senior team, and Pegasus Capital in setting up the BGIC.”

Yannick Glemarec, GCF Executive Director, said, “I’m pleased to see the rapid progression of BGIC that was initially proposed as an idea by Prime Minister Mottley to address climate finance challenges in the Caribbean. GCF, through its Project Preparation Facility, will support the green bank initiative as it will help unlock the climate innovation and investment urgently needed by countries in the Caribbean to respond to the impacts of climate change.” Also said, “I am thrilled to announce Pegasus’ partnership with BGIC and GCF to enable access to finance to those most vulnerable to the impacts of climate change and support local entrepreneurs as part of the climate solution. There is no green future without the dreamers and doers who, with access to low-interest financing, will unlock technologies and open markets that serve the global good. BGIC will set a great model that can be replicated in other climate-vulnerable regions to fund climate mitigation and adaptation solutions and raise community awareness for more resilience.”