The Asian Infrastructure Investment Bank (AIIB) and the Development Bank of Latin America (CAF), have signed a Memorandum of Understanding (MOU) to enhance their collaboration on promoting renewable energy and green initiatives in Latin America and the Caribbean. The agreement marks a commitment by both institutions to strengthen their development cooperation. It will catalyze additional resources through cofinancing measures to maximize impact and deliver greater value to common Member economies in the region.

The MOU was signed on Oct. 13, 2022 by AIIB’s Vice President of Policy and Strategy, Sir Danny Alexander, and CAF’s Vice President of Finance, Gabriel Felpeto, in Washington D.C. Under the MOU, AIIB and CAF will promote joint initiatives that contribute to accelerating the energy transition in Latin America and the Caribbean, with an emphasis on climate change and renewable energy. The MOU comes at a pivotal moment when countries and multilateral institutions are seeking sustainable pathways aligned with the Paris Agreement and United Nations 2030 agenda.

“The partnership between our two institutions enables more effective cooperation in the areas of sustainable economic development and climate change,” said Alexander. “By working together, AIIB and CAF will help accelerate the mobilization of critical private climate finance flows in the region and leverage each other’s comparative advantages to maximize development impact. For the AIIB, this is also an opportunity to learn from CAF’s rich experience in financing infrastructure projects in Latin America.”

Felpeto said the MOU will play a critical role in facilitating access to added resources in the form of cofinancing, thus contributing to CAF’s goal of becoming the Green Bank of Latin America and the Caribbean.

“The region faces great challenges in terms of sustainable development,” said Felpeto. “Our mission as the green bank of Latin America and the Caribbean is to support the countries of the region in responding at the speed these challenges demand and reposition them on the road toward sustainable development. This agreement will enable us to identify and promote investment opportunities in sectors of common interest that will promote sustainable economic recovery and contribute to the fight against climate change.”

The collaboration with CAF will support AIIB in achieving its climate finance targets. Following AIIB’s Corporate Strategy, the Bank is targeting a 50-percent share of climate finance in its actual financing approval by 2025, reflecting its commitment to the Paris Agreement. The partnership is also aligned with AIIB’s existing efforts in mobilizing private investments to facilitate access to clean, safe and renewable energy across its Members.