Multilateral Development Banks (MDB) should strengthen their collaboration to find common solutions that help countries meet their climate finance targets.

Speaking during the “Innovative approaches to accelerating climate finance flows into the Caribbean” at the 28th Annual United Nations Climate Change Conference (COP28) in Dubai, United Arab Emirates, Caribbean Development Bank (CDB) Vice-President of Operations, Mr. Isaac Solomon, noted that enhanced collaboration at every level is an urgent imperative and CDB’s involvement in the Finance in Common Summit provides such a platform to unlock innovation in MDBs, knowledge sharing, and co-financing to obtain scale.

The panel discussion focused on concrete opportunities to adopt and implement innovative approaches to increase the flow of climate finance into the Caribbean region, strategic ways to mobilise highly concessional climate finance from multilateral climate funds, innovative approaches to scaling up climate finance flows from MDBs and strategies for mobilising private sector financing through blended finance approaches.

“If you look at the context in which we are operating, particularly at the global level, all MDBs agree that the climate finance needs surpass our collective balance sheets and so we cannot do it alone. We need to collaborate where we can bring additionality to each other based on our comparative advantages and find creative says to crowd in private sector finance,” Mr. Solomon said.

He added that MDBs also need to review the cost of capital and critically review the range of instruments available to countries to provide more headroom for those adversely affected by natural hazard events.

Stephen O’Driscoll, Head of Environment, Climate and Social Policy, European Investment Bank (EIB), noted that his organisation depends on blended finance for some of the programmes currently being rolled out in the Region.

“Partnerships are so key. I am thinking of some of the partnerships we set up with our increased involvement in the adaptation market. Creativity is also important. You need to be creative to be constantly pushing the boundaries with other MDB partners,” Mr. O’Driscoll said.

Mr. Solomon suggested that given the scarce financing available, borrowing member countries (BMCs) need be more strategic in their use of highly concessional financing while establishing ambitious, credible climate finance targets even as they aim to find innovative ways of meeting climate change targets.

The Caribbean is particularly vulnerable to climate change but climate finance flows into the region have been modest. CDB currently works with its BMCs to help shape their priorities and create effective resource allocation toward high-impact areas.