The Japan International Cooperation Agency (JICA) has partnered with Washington-headquartered Inter-American Development Bank (IDB) to invest $3 billion in energy and infrastructure across Latin America and the Caribbean.
The new IDB-JICA agreement expands on the partners' existing Co-financing for Renewable Energy and Energy Efficiency (CORE) programme. The latter was created in 2012 to support climate change mitigating energy investments in Central America and the Caribbean.
According to IDB’s statement, the new agreement will increase the target amount of JICA’s concessional loans from $1 billion to $3 billion and will extend the programme's duration until April 2021.
This will also broaden CORE’s geographical reach, enabling partners to fund projects in all low- and middle-income IDB borrowing member countries, as well as more vulnerable Caribbean economies not previously covered by the programme, IDB said.
According to Nikkei, JICA and IDB will launch a $5 million infrastructure fund to help identify and develop potential infrastructure projects in Central America.
Today, the programme has channelled approximately $800 million of JICA’s concessional resources, which are leveraged by IDB loans, to the regions. The first co-financing loans have been approved by the partners to fund renewable energy and energy efficiency programmes in Nicaragua and Honduras, as well as the development of geothermal energy in Costa Rica.
Co-financing programmes for the Eastern Caribbean to develop geothermal energy are currently in the advanced stages of preparation, IDB added.
“Latin America and the Caribbean have enormous energy and infrastructure needs and we believe the programme will help ensure that these investments have an even greater positive impact,” said IDB’s president Luis Alberto Moreno.
Japan has contributed over $5 billion to IDB’s financial resources and more recently an additional $3.5 billion to the bank’s capital increase. It is now IDB's largest co-financing partner.
Earlier this month, JICA agreed to provide an initial $1.5 billion in equity to a $6 billion infrastructure fund in partnership with the Manila-based Asian Development Bank. The fund targets a range of infrastructure sub-sectors, such as transportation, communications and health, in Asia and the Pacific.