This document discusses strategies to increase infrastructure investment in the Caribbean region. It notes that climate change poses risks to Caribbean development and that adaptation requires significant investment. However, high debt levels in many Caribbean countries limit their ability to borrow for infrastructure. The document outlines sectors that require investment like energy, transport, and water. It also discusses how the Caribbean can access global climate finance and presents data on infrastructure investment needs by sector and country in the region totaling over $21 billion. Overall, the summary emphasizes that strategic investment in resilient infrastructure is critical for Caribbean development but financing challenges exist due to climate risks and debt burdens.
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Caribbean Infrastructure: Strategies to Increase the Appeal of the Caribbean as an Infrastructure Investment Destination
1. CARIBBEAN INFRASTRUCTURE:
STRATEGIES TO INCREASE THE APPEAL OF
THE CARIBBEAN AS AN INFRASTRUCTURE
INVESTMENT DESTINATION
CARIBBEAN INFRASTRUCTURE FINANCE FORUM
Daniel Best
Director, Projects Department
Caribbean Development Bank
December 6, 2016
2. The IPCC’s FifthAssessment Report:
What’s in it for Small Island Developing States?
Further climate change is inevitable in the coming
decades
Climate change is affecting SIDS’ growth and
development
Climate change poses an existential threat to some
SIDS
Adaptation can reduce the impacts of climate change,
but there are limits and risks involved
3. The IPCC’s FifthAssessment Report:
What’s in it for Small Island Developing States?
Economic cost of adaptation to climate change is
high in SIDS relative to the size of their economies
SIDS stand to benefit from further integration of
climate adaptation, mitigation and development
approaches
Transformation to a low-carbon economy implies new
patterns of investment: AN OPPORTUNITY
4. Volume of lending by Sector
122,895
240,302
98,940
10,694
Distribution of loans, secondary mortgage, equity
and grants (US $'000) (2010-2014)
Environmental
Sustainability and
Disaster Risk Reduction
Multi-sector & Other
Power, Energy, Water
and Sanitation
Agriculture and Rural
Development
894
25163
85763
11773
Volume of lending under Environmental
Sustainability and Disaster Risk Reduction
(US $’000) (2010-2014)
Environmental
Sustainability
Sea Defence/Flood
Prevention/Control
Disaster Prevention
and Preparedness
Reconstruction
Relief and
Rehabilitation
CDB funding extends across a wide
range of sectors
A significant portion has been
allocated to assisting BMCs in
disaster risk reduction,
preparedness and rehabilitation
7. Borrowing Member Countries’ nationally
determined contributions
Country Transport RE/EE PA/
Forestry
Coastal
Resilience
Water Agri. Infrastructure Financial
Risk
Mgmt.
ANTIGUA &
BARBUDA
BARBADOS
BAHAMAS
BELIZE
DOMINICA
GRENADA
GUYANA
JAMAICA
ST. KITTS & NEVIS
ST. LUCIA
ST. VINCENT &
THE GRENADINES
SURINAME
TRINIDAD &
8. To what degree is investment appetite
impacted?
• Project preparation support useful
and or /necessary
• Technical analytical “Know How”
limited within the Region and
outside the Region
• Incremental project preparation
costs 2% to 14%:
• Credible climate, environment
datasets, analytical support
• Updated technical standards,
designs, technologies, materials
Project cost increases of 5% to 10%
9. Critical issue: High Debt
Change in Debt/GDP ratio 2009-2014 and
2014 Debt/GDP Ratio
11. 0
20
40
60
80
100
120
140
Debt to GDP
DEBT-TO-GDP RATIO 2015 Antigua and Barbuda
Bahamas
Barbados
Belize
Dominica
Grenada
Guyana
Haiti
Jamaica
St. Kitts and Nevis
St. Lucia
St. Vincent and the
Grenadines
High fiscal deficits and growing debt (domestic)
12. Vulnerability to Climate Variability & Change
• High
incidence
due to
geography
(tropical
climate,
topography,
etc.)
• High impact
related, inter
alia, to size,
openness
and insularity
13. Lifetime of infrastructure
0
10
30 Roads, Bridges, Sea
Defences
40 Power Plant
50 Ports
60
70
80 Dams, Reservoirs
90
100
100 +
Adapted From– Economic Aspects of Adaptation Climate
Change: Integrated Assessment Modelling of Adaptation
Costs and Benefits, OECD Environment Working Papers
No.6 OECD Publishing, 2010
14. Factoring Climate Change into the risk
profile of infrastructure projects
Explicit CC considerations REQUIRED from the TORs Stage
Address interdependencies within infrastructure networks
Strategic vision and sector planning
Strengthen institutional capacity and cross-agency relationships and
partnerships
Sectoral Governance Reform - prioritize overcoming inefficiencies
15. Accreditation to global climate finance funds
Adaptation Fund
FEBRUARY 2016
Green Climate Fund
OCTOBER 2016
21. GCF impact areas
GCF
Result
Areas
Low-emission
energy access
and power
generation
Low-emission
transport
Buildings,
cities,
industries and
appliances
Forest and
land use
Resilience of
vulnerable
populations
Health, food
and water
security
Infrastructure
and built
environment
Ecosystems
and ecosystem
services
22. Renewable Energy
• Cost of imported fuel – still relatively
high
• High electricity prices – small scale of
operations
• How to reduce GHG emissions –
NDCs
• High % govt. spend on electricity –
fiscal implications, contributing to
indebtedness
• Ignoring Green Economy
opportunities
• Little focus on energy efficiency –
wasted energy across all sectors
• Regulatory and capacity issues at all
levels – technical, financial,
legislative, regulatory
ENERGY SECURITY =
ECONOMIC SECURITY
COMPETITIVENESS
FOREIGN EXCHANGE
SAVINGS
REDUCE GHG
EMISSIONS - NDCs
STABLE ENERGY
PRICES
“GREEN” JOB
CREATION