An unprecedented financial commitment will set the course for sustainable development and green transformation in Latin America and the Caribbean over the next five years. The Development Bank of Latin America and the Caribbean (CAF) announced an investment of USD 40 billion aimed at accelerating climate action, energy transition, and the conservation of essential ecosystems.
The initiative seeks to strengthen water security, sustainable mobility, and agricultural prosperity, with a focus on the Amazon, Patagonia, páramos, and mangroves, considered the planet’s ecological lungs.
The announcement was made within the framework of COP30 in Belén and the Celac-European Union Summit in Colombia, consolidating CAF as a key player in the triple green, digital, and social transition driven by the European Union through its Global Gateway program.
A financial model aligned with climate action
The new investment plan positions CAF as one of the leading green development institutions in the hemisphere. The bank reached its goal in 2024 of allocating 40% of its approvals to sustainable projects, two years ahead of schedule, and plans to increase that proportion to 50% by 2030.
This strategy combines innovative financial instruments, such as debt-for-nature swaps, sustainability-linked loans, and impact investments, along with the promotion of green public policies and partnerships with local governments.
The aim is to ensure that resources reach communities, cities, and territories directly facing the effects of climate change, from drought to biodiversity loss.
Four pillars for sustainable transformation
CAF’s plan is structured around four strategic areas:
Just energy transition: USD 10 billion will be allocated to decarbonize the electricity, industrial, and transportation sectors, ensuring clean and affordable energy. The region, which already generates 30% of its energy from renewable sources, seeks to enhance its global leadership in solar, wind, hydroelectric, and geothermal energy.
Climate resilience and protection of strategic ecosystems: this area will involve projects that combat deforestation, restore soils, and strengthen regenerative agriculture.
Development of resilient territories: priority will be given to water security, sanitation, drought and flood management, and sustainable mobility. It also promotes creative economies and responsible tourism, in harmony with nature.
Physical and digital infrastructure: designed to close regional gaps and improve sustainable connectivity in transportation, energy, and logistics.
Financial innovation and ecosystem protection
Among the most notable initiatives is the debt-for-nature swap in the Lempa River, El Salvador, which freed up USD 1 billion for conservation and community development.
CAF also created the BiodiverCities Network, which brings together local governments around sustainable urban projects focused on biodiversity. In the marine realm, the institution issued its first blue bond for 100 million euros to finance ocean protection and the well-being of coastal communities.
The conservation of key ecosystems —from tropical forests to Patagonian wetlands— will be a priority, with the aim of increasing direct financing for biodiversity in 15 areas of high ecological value.
Boosting local green economies
CAF’s green agenda also promotes productive inclusion. Through the Green SMEs initiative, in partnership with the Green Climate Fund, credits and technical assistance are provided to companies in Chile, Peru, Ecuador, and Panama.
These funds enable the development of sustainable solutions in renewable energies, energy efficiency, and responsible land use, strengthening the economic resilience of communities in the face of the climate crisis.
The financing is complemented by the issuance of sustainable bonds and the mobilization of resources from international green funds and partnerships with multilateral organizations, NGOs, and the private sector.
The benefits of an investment for the planet
CAF’s commitment represents a unique opportunity to transform the development model of Latin America and the Caribbean. By prioritizing sustainability, the region can move towards more inclusive economies, resilient and low-carbon.
The investment will help reduce greenhouse gas emissions, restore degraded ecosystems, and strengthen the water and food security of millions of people.
Additionally, it will drive technological innovation, the creation of green jobs, and regional integration around a common agenda: protecting biodiversity and ensuring a livable future for future generations.
