chapter  3
27 Pages

Greening development lending in the Americas

Trends and determinants
WithFei Yuan, Kevin P. Gallagher

The annual GDP growth rate of Latin America and the Caribbean (LAC) was about 3%, lagging far behind that of other developing regions. While the commodity cycle has come to an end, long-term and sustainable growth is under threat by a number of factors including a significant green finance gap. Development banks have a unique role to play in closing these gaps in LAC. These banks seek to correct key market and government failures and crowd in private-sector economic activity into areas such as cleaner energy technologies, as well as into policy formation and anti-poverty programs. Eleven development banks provide the majority of development finance to Latin American and Caribbean governments. There are a variety of definitions and approaches to measuring “green finance,” even among development banks. Different development banks appear to serve different clients in the Americas.