The Caribbean Development Bank (CDB) is moving to help unlock millions of dollars in commercial bank financing for the business community.
CDB president Daniel Best said on Tuesday the Barbados based institution’s board approved a trade finance guarantee product noting it would be launched “in a couple of months”.
He made the announcement here in St George’s, Grenada, during a panel discussion on infrastructure for development on the second day of the fourth AfriCaribbean Trade and Investment Forum 2025 at the Radisson Conference Centre.
“We have a role to play, we have access to concessional resource, we recognise that we have capacity gaps in our countries, so we need to step up. So how are we doing that? [Our board has approved] a trade finance guarantee product. . . and we will be launching it in a couple of months,” he said.
“It is a guarantee scheme that provides cover to commercial banks to further de-risk SMEs and private actors who are seeking to do intra regional and international trade. Why is that important? Because we hear our private actors complaining about the high thresholds that they have to overcome to access commercial financing.”
Earlier, Best identified the two main challenges facing infrastructure development in the Caribbean. He said “the Caribbean is built for a climate reality that no longer exists” and there was insufficient amounts of affordable financing.
Climate reality
“Most of our infrastructure was built during colonial times, the climate reality that we currently live through is far, far past that. We see that in 2017 we had four one, in 100, year events over a sixweek period passing through this neighbourhood, seven of the top ten most vulnerable countries in the world are in our neighbourhood in the region,” he stated.
“We cannot within the Caribbean continue to rebuild our infrastructure after every hurricane season. If you ask any of the ministers of finance, . . . they will tell you that the majority of the debt burden within our economies is from taking our financing to rebuild
any post disaster period.
Need infrastructure
“So it is not nice to for the Caribbean; this is our survival we are speaking about. We need infrastructure that is able to respond to the weather events that we see and to do that, we need concessional resources to build back better and faster.”
One major issue the CDB president said was needed to make investing in the region easier was one set of regulations.
“What investors are looking for is predictability. They want to come into a space where they know what is going to happen. The next thing is, of course, that private investors are averse to risk, what they are averse to is unmanaged risk,” he noted.
“And so in the multilateral development banking space, this is where we need to provide some cover. This is what we are set up to do. We can’t sit on the sidelines and continue to watch what many may call possible distress between governments and the private sector.”
Oluranti Doherty, managing director, export development, Afreximbank, said her organisation had “developed some tools to . . . unlock private capital investment”, including the Afreximbank Guarantee Programme.
“And through our guarantee programmes, we provide investment-based guarantees, we provide country risk guarantees, because one of the key things we tend to hear from people in investing in Africa is [about] perceived risk and I know it’s the same also in the Caribbean,” she said.
Solutions available
“And through our Afreximbank Guarantees Programme . . . we are able to attract private investments into the continent and our member countries of the Caribbean.
“So at Afreximbank we have a bouquet of financial solutions available and we look forward to working with a lot of development finance institutions in the Caribbean, even commercial banks within the Caribbean, to be able to quickly scale up infrastructure investment, not just in the renewable [energy] space but also in the industrial space, because we do need this across the Caribbean region.” (SC)
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