What do you know about the Caribbean Development Bank’s financing of regional development projects?
The Caribbean Development Bank (CDB) is regarded as the English-speaking Caribbean’s premier source of development financing. Established in 1970 in response to a clearly identified need for an accessible source of development funds for the lesser developed countries in particular, CDB has earned the respect of its development partners, peers and the financial community as a first-rate development institution. This has been due mainly to the Bank’s strict adherence to international best practices and rigorous due diligence in its operations especially with respect to the appraisal, approval, financing and supervision of development projects.
During its 40 years of operation to December 2010, CDB approved US$3.77 billion (bn) in loans, grants and equity financing for projects in its 18 Borrowing Member Countries (BMCs). Approximately US$3.08 bn of that amount approved was disbursed during the same period. CDB’s over-arching mandate is to reduce poverty in its BMCs through social and economic development. This is achieved by financing capital and technical assistance projects in a range of sectors as well as by providing needed budgetary support to BMCs in fiscal distress.
The Bank’s excellent credit rating allows it to access financial resources at better rates than most of its BMCs can on world capital markets. This together with shareholder capital and reflows from previous loans allows CDB to lend to its BMCs at favourable interest rates and terms through its “hard fund” window. Shareholders also contribute to Special Funds which are lent and granted to BMCs at even more concessionary terms. CDB has leveraged its resources to finance approximately 142 projects in the last 10 years. These have included some 811 contracts, most of which have been for construction and have ranged in value from US$0.2 million (mn) to US$54 mn.
Norman I. Cameron M.Sc. (Eng); P. Eng
Division Chief, Project Services Division
Caribbean Development Bank