There is a need to scale up private-sector investments in climate change mitigation, and international climate finance can play a catalytic role to make this happen. The unique role of National Development Banks (NDBs) can help overcome some of the difficulties that hamper these initiatives. NDBs’ special knowledge and long-standing relationships with the local private sector put them in a privileged position to access local financial markets and understand local barriers to investment. Compared to commercial banks and investment funds, NDBs have greater potential to take risks and provide long-term financing in local currency.
Understanding this, the Inter-American Development Bank (IDB) commissioned Momentus (formerly IFCL) to assess the role that NDBs in Latin America and the Caribbean could play in mobilizing international climate finance. We collaboratively prepared and delivered this final report analyzing the unique role that NDBs can play at the national level to scale-up private-sector financing for climate change mitigation projects. It focuses on how they can do so through the intermediation of international climate finance in their respective local credit markets.