Barbados is set to become the smallest full member of the Development Bank of Latin America and the Caribbean (CAF), opening access to US$18 billion ($36 billion) in loan financing, not only for the government, but also for the island’s private sector and individuals, as Finance and Economic Affairs Minister Ryan Straughn introduced legislation to ratify membership on Tuesday.
Straughn piloted the Development Bank of Latin America and the Caribbean Bill which will formalise Barbados’ transition from Series C to Series A status, allowing the country to have a greater say in the bank’s operations and qualify for expanded funding opportunities.
Based in Caracas, Venezuela, CAF – formerly the Andean Development Corporation (or Corporación Andina de Fomento) – is a regional development bank owned by its member countries and financial institutions. It focuses on supporting sustainable development, regional integration, and social inclusion across Latin America and the Caribbean.
Elevating to Series A membership in CAF will require the island to pay membership dues of over US$1 million ($2 million). As a result, the administration is repealing the existing legislation and replacing it with the new bill.
More importantly, as the World Bank — in which the United States has significant influence — begins to change its posture on financing climate-related development projects to align more closely with the Donald Trump administration’s policy position, Straughn noted that the move provides Barbados with greater insulation and flexibility to access concessional loans.
He told the House: “We received financing from the World Bank, because of COVID initially. Then because of the climate issues that arose in 2021, Barbados was able to successfully make a valid case that middle-income countries … that usually do not get support from the World Bank, but because of our vulnerability, countries like Barbados and The Bahamas, were able to successfully argue that because of our vulnerability … [we should] have access to financing for development.”
Unlike other institutions where non-borrowing member countries exert significant influence on lending policies, CAF is governed primarily by its borrowing members and operates in their collective interest, he added.
The Christ Church East Central MP described CAF as “a financial institution which is owned by its members. It’s almost like a credit union … for Latin America and the Caribbean. And like a credit union, when you put your monies into a credit union, you own a piece of the action”.
Straughn also cautioned that it was “critically important to still have access to those concessional window opportunities, particularly when crises that are not of our making happen”.
CAF provides concessional loans, grants, and technical assistance for projects in infrastructure, energy, water, transport, and climate resilience, often tying financing to transformational development outcomes for the region. (IMC)
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