The Development Bank of Jamaica (DBJ) in collaboration with the Caribbean Alternative Investment Association (CARAIA) co-hosted a webinar under the theme ‘Blended Finance Options for funding resilient infrastructure’ on June 6, 2023.
Matthieu Pegon, head of Blended Finance at IDB Invest, provided an overview of what constitutes blended finance and how it relates to public finance and private investment.
“Blended finance is a subsidy and when donors extend development finance to development finance institutions, they really ask us to operate in the field of temporary subsidy. That means that we are not supposed to use blended finance in anything that relates to permanent subsidy or long-term subsidy. That typically constrains us in what we are able to do with blended finance and really implies that whenever we use blended finance there is an implicit assumption that that subsidy has to result in a change of the market so that subsequently it is no longer needed. One of the most important tests for us development finance practitioners when we decide whether or not to extend concessional finance is whether there is a good case that our intervention is going to result in a change of the market that will in turn result in that subsidy being no longer needed” he said.
Additionally, he recommended funding sources and outlined the role of brokers such as national development banks and other financial institutions in the ecosystem.
The webinar was attended by the DBJ’s and CARAIA’s stakeholders – which included entrepreneurs, fund managers, angel investors and venture capitalists – and close to 100 other participants from the Caribbean, USA, UK, Canada, Fiji, Kenya, Canada, Switzerland, Japan, Vietnam, and South Africa.
The event provided learning opportunities from key experts to investment firms, legal firms, business advisors, NGOs, government entities, and finance & banking organizations, among others, on utilizing the blended finance modality to de-risk resilience projects, and to crowd in private capital funding from regional and global sources through the establishment of innovative funding vehicles.
A panel discussion that included Matthew McClymont and Dr Gillian Marcelle, experienced practitioners from the International Finance Corporation and Resilience Capital Ventures, respectively, provided insights and experience on unlocking blended finance instruments especially in certain sectors such as climate change, energy, and small businesses.
Presentations were delivered by Nicola Russell, Manager of DBJ’s Public-Private Partnership & Privatisation (P4) Programme, George Nicholson, Transaction Director in the Ministry of Economic Growth & Job Creation, and Elva Williams-Richards, Senior Vice President at the Port Authority of Jamaica, on the Government’s P4 Programme and gave an overview of the infrastructure projects that are being prepared by the relevant Government Ministries, Departments and Agencies.
The DBJ is the central implementing agency for the Government’s P4 Programme which facilitates the mobilization of private capital to finance and implement critical infrastructure and other economic development in Jamaica. PPPs are being implemented to upgrade the country’s highways, seaports, airports, and water infrastructure while other projects are being contemplated to upgrade sewage treatment, solid waste management, and judicial complexes.
The Bank is also an anchor investor in private capital funds, including energy infrastructure, credit, private equity growth and SME funds.
Speaking at the seminar, Audrey Richards, head of the DBJ’s Private Capital Technical Unit, said, “As Jamaica continues to introduce new instruments and strategies such as blended finance and impact investing. The DBJ is creating a conducive ecosystem for deepening of the private capital markets in order to provide the funding to accelerate Jamaica’s growth performance, and address the myriad of socioeconomic challenges it faces, some of which are targeted in the Sustainable Development Goals.
“CARAIA’s involvement in this webinar is strongly motivated by its vision to develop a globally recognized alternative investment ecosystem in the Caribbean. This vision is being realized through our strategies to attract international investors and by equipping and facilitating our members ---to develop strong partnerships that will expand their market penetration in the alternative investment industry, across the Caribbean region.”
June 20, 2023
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