By Nuel Navarrete
The Inter-American Development Bank is promoting sustainability among low-income households through a new fund that will support energy efficiency programs in Latin America.
Under its Multilateral Investment Fund arm, the bank is funding with $50 million the new Microcarbon Development Fund to extend energy efficiency technologies to the grassroots level.
Colombia and Mexico will be the first target countries for the fund’s projects. Later to be funded are Brazil and Ecuador and Central America among other regional groupings.
The development fund is expected to provide financing and grants amounting to at most 10 projects, which will get between $2 million to $8 million each. Investments will be made in residential, commercial and municipal programs.
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Programs are designed for retrofitting buildings with energy-saving air conditioners, refrigerators, compact fluorescent lamps and L.E.D.-powered street lights. New clean technologies such as solar water heaters will also be introduced to promote energy efficiency and cut greenhouse gas emissions.
Concurrently, these projects are aiming towards the earning of carbon credits through the Clean Development Mechanism and other schemes.
Improving forest cover
On top of clean technology projects, the funding will devote as much as 20 percent of its total committed capital to preserving and rejuvenating forest covers across the region.
These land use investments will take advantage of emerging carbon schemes such as the Voluntary Carbon Standard and the Climate Action Reserve.
“Access to carbon markets and energy efficient technologies has been closed to all but the largest investors in Latin America and the Caribbean,” said Julie Katzman, general manager of the Multilateral Investment Fund.
“The Microcarbon Development Fund is a truly innovative way to spread the benefits of energy efficiency and carbon finance to lower income households, microenterprises, small companies and forest communities, while combating climate change,” she added. MGM Innova Capital L.L.C. will manage the fund.
