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National Observer
14 hours ago
- Business
- National Observer
Bank unveils green loans plan to unlock trillions for climate finance
This story was originally published by The Guardian and appears here as part of the Climate Desk collaboration An innovative plan to use public money to back renewable energy loans in the developing world could liberate cash from the private sector for urgently needed climate finance. Avinash Persaud, a special adviser on climate change to the president of the Inter-American Development Bank (IADB), who developed the proposals, believes the plan could drive tens of billions of new investment in the fledgling green economy in poorer countries within a few years, and could provide the bulk of the $1.3tn in annual climate finance promised to the developing world by 2035. 'This could be an engine for green growth, and produce the trillions needed for climate finance in the future,' he told the Guardian. 'It could be a transformation.' His ideas will be set out in detail at a UN meeting in Germany this week, kicking off negotiations for the Cop30 climate summit that will take place in Brazil this November against a worrying global background for the discussions. Having missed a deadline in February, the world's largest economies still need to submit plans for their greenhouse gas emissions before the Brazil summit, but so far only a few have done do so. But research seen by the Guardian, carried out by the campaign group Oil Change International, shows that many developed countries are still planning to expand their extraction of oil and gas, despite promising at Cop28 in 2023 to 'transition away from fossil fuels'. The analysis found that the US, Canada, Norway and Australia were responsible for 70% of projected new oil and gas expansion in 2025-35. Romain Ioualalen, the global policy lead at Oil Change International, said: 'It is sickening that countries with the highest incomes and outsized historical responsibility for causing the climate crisis are planning massive oil and gas expansion with no regard for the lives and livelihoods at stake.' At the two-week meeting in Bonn, which ends on 26 June, the vital issue of finance for developing countries – which they need in order to cut their emissions and cope with the impacts of extreme weather – will also come to the fore. The proposals by Persaud and others to buy up loans to renewable energy projects in the developing world could allow billions of dollars of private sector cash to flood the sector, in a big boost to global climate finance. The plan, which is being pioneered by the IADB, would involve getting taxpayer-funded development banks to buy existing loans to green projects in poor countries, which would free up investment from private sector lenders. Such loans are relatively low risk because they are already performing – but because they are in developing countries, with credit ratings lower than those of rich states – mainstream private sector investors such as pension funds are often forbidden from touching them because of their strict rules on credit worthiness. But if those loans are backed instead by development banks, which can provide guarantees against default, and which themselves have impeccable credit ratings, the 'repackaged' loan finance can meet private sector criteria. 'The lightbulb moment was realising there was $50bn in performing green loans in Latin America,' said Persaud, a former adviser to Barbados's prime minister, Mia Mottley, who has championed climate finance. 'Why not buy that to enable new projects to be created?' Key to the concept is that when the loans are bought up by the development banks, which pay a small premium to the current private sector creditors that own the loans, the originators of the renewable energy projects must agree to use the finance they gain access to in new projects. This creates a 'virtuous circle,' by which when the loans are bought up, developers – who already have expertise in setting up successful renewable energy schemes – seek new opportunities, which leads to further investment. IADB is working on launching the programme now, and is expected to send a request for proposals within the next few months, before COP30. The initial portfolio of loans is likely to be about $500m to £1bn. Several private and public sector experts said Persaud's ideas could have a big impact. Mattia Romani, a senior partner at Systemiq, a consultancy that is working with Cop30 on climate finance, said: 'It is a very powerful initiative, both pragmatic and innovative. Given the constraints we will inevitably face in the coming years, securitisation is one of the few realistic tools to reach [the sums needed]. 'This initiative is designed to unlock institutional capital by leveraging the balance sheets of domestic commercial banks – securitising their loans so that they can meet the fiduciary needs of institutional investors, and turning them into engines for transition finance. What's new is the direct engagement with local banks – we are starting with a pilot in Latin America.'
Miami Herald
21-02-2025
- Business
- Miami Herald
U.S. envoy says Trump's ‘unpredictability' on Venezuela, Cuba is an asset. Is it?
President Trump's recently appointed State Department special envoy to the Americas, Mauricio Claver-Carone, may be accused of many things — but being shy about speaking his mind is not one of them. Claver-Carone, 50, who was born in Miami to Cuban immigrants, speaks fluent Spanish and served as top White House adviser on Latin American affairs during Trump's first term in office, made me raise my eyebrows several times during a one-hour interview last week. Among the things he said: ▪ When I asked him about Trump's dismantling of the U.S. Agency for International Development (USAID) he suggested that the U.S. government will not only revise its foreign aid programs but also its contributions to regional organizations such as the Inter-American Development Bank (IADB.) Claver-Carone, who served for about two years as IADB president, said the top regional development bank 'es un cuento,' which can be loosely translated as 'is a scam.' He said most people at the biggest regional development bank are there to benefit from U.S. visas and good pensions, rather than to help the region. 'What is its impact, and what does 'development' mean nowadays?' he asked. 'We must re-evaluate what development means.' Claver-Carone was forced to leave the IADB in 2022 after an internal investigation charged him with having a romantic relationship with an aide and substantially increasing her salary. He has denied any improper conduct. But Claver-Carone's criticism of the IADB raises questions about whether the Trump administration plans to maintain the U.S. financial contribution to the bank, which for decades has helped finance roads, bridges and key infrastructure projects in the region. ▪ Asked about Mexico, the U.S. envoy had surprisingly warm words toward leftist Mexican President Claudia Sheinbaum. Talking about Trump's threat to impose a 25% tariff on Mexico, which Trump has justified in part by claiming there is an 'intolerable alliance' between the Mexican government and the drug cartels, Claver-Carone said that Sheinbaum 'has proved to be a great leader.' He added, 'I have been impressed with President Sheinbaum, and with the way she has worked and collaborated, because I think she knows and understands that with controlled migration and the appropriate security policy, Mexico could be a much more successful country than it is.' When I countered that Trump's mere threat of tariffs on Mexican goods is counter-productive, because it deters investments in Mexico, cripples the country's economy and drives up migration to the United States — the very thing Trump wants to prevent — Claver-Carone rejected that idea. He responded that pushing Mexico to eradicate the drug cartels will make it a more stable country, and fewer people will want to leave. Anyway, Claver-Carone's unusually kind words toward Sheinbaum lead me to suspect that the Trump administration may be preparing to declare a face-saving victory in U.S.-Mexico talks on migration and drugs. That would allow Trump to postpone his early March deadline on Mexico to meet his demands to avoid the U.S. tariffs. ▪ On Nicaragua, one of the region's most brutal dictatorships, he said that the Trump administration is making rapid progress in talks with Central American countries and the Dominican Republic to expel Nicaragua from the Central American Free Trade Agreement (CAFTA.) That process is likely to start 'within months,' he said. Losing preferential trade access to the U.S. market would be a major blow to the regime of Nicaraguan dictator Daniel Ortega. Without such benefit, Nicaragua's exports of coffee, sugar, cigars and other goods to the United States — by far its biggest export market — wouldn't be able to compete with those of El Salvador, Honduras and other countries in the region. ▪ On Argentina, Claver-Carone didn't sound too optimistic about President Javier Milei's proposal to sign a free trade deal with the United States. Noting that Trump is not too keen on free trade agreements, Claver-Carone said, 'An investment promotion agreement [with Argentina] is much more feasible than a free trade agreement.' ▪ On Venezuela, Claver-Carone disputed many analysts' perception that Trump has betrayed the Venezuelan opposition by striking a deportees-for-oil deal with the Maduro regime. Trump has revoked Temporary Protected Status (TPS) from nearly 600,000 Venezuelan immigrants in the United States. His special envoy to Venezuela, Richard Grenell, met in Caracas with Maduro, after which Maduro accepted sending flights — paid for by the Venezuelan government — to bring back deportees from the United States, and released several U.S. hostages. Meantime, contrary to Venezuelan opposition hopes that Trump would strengthen U.S. sanctions on Venezuela, the U.S. president has not revoked Chevron's license to operate in Venezuela. Chevron's oil exports are one of Venezuela's major sources of income. 'There have been no [U.S.] concessions,' Claver-Carone told me. He said that Maduro accepted U.S. demands to take deportees and release hostages because of fears that the Trump administration would impose drastic economic sanctions, like he did in his first term in office, if Venezuela didn't comply. ▪ On Cuba, much like with Venezuela, Trump's most effective strategy is to be unpredictable, and instill fear on the other side, Claver-Carone said. 'The worst thing that can happen is [for a government] to be predictable,' Claver-Carone told me. 'Being predictable helps other actors [your adversaries] anticipate your moves.' After the interview, I couldn't help wondering whether the Trump administration is deliberately unpredictable, or is just saying that to cover a pattern of constant ad-libbing. The conflicting hard-line statements on Venezuela by Secretary of State Marco Rubio and the smiling pictures of Trump's envoy Grenell in Caracas shaking hands with Maduro make me suspect there's a lot of chaos within Trump's inner circle. But this administration is just beginning. We will soon know for sure whether it is guided by masterful negotiation, or terrible improvisation. Don't miss the 'Oppenheimer Presenta' TV show on Sundays at 9 pm E.T. on CNN en Español. Blog:
