The Dominican Republic, represented by the Ministry of Economy, Planning, and Development (MEPyD) and the Central Bank of the Dominican Republic (BCRD), has signed an agreement to receive a non-refundable contribution from the European Union for the regional program “Greening the Caribbean’s Financial System,” with the BCRD as the direct beneficiary.
A substantial €5.85 million grant from the European Union will be used to implement a tailored program of technical assistance, investment subsidies, and studies in the Dominican Republic. This initiative aims to enhance the country’s financial system’s resilience against climate change.
A significant portion of the funding, €500,000, will be directed specifically to the Central Bank of the Dominican Republic (BCRD). These funds will cover the cost of hiring a consulting service and support additional activities such as study trips and exchanges with other central banks that have successfully implemented climate stress tests and adopted effective regulatory policies.
The technical assistance component of the program will focus on building capacity within the Central Bank and other Dominican financial institutions. This will enable them to accurately assess and measure climate-related risks, as well as evaluate environmentally friendly projects. Experts will provide training to help structure these projects and develop procedures for their implementation in financial policy measures adopted by the BCRD.
The signing ceremony was led by the governor of the Central Bank of the Dominican Republic (BCRD), Héctor Valdez Albizu; the Minister of Economy, Planning, and Development (MEPyD), Pavel Isa Contreras; the European Union Ambassador, Katja Afheldt; the BCRD Manager, Ervin Novas Bello; and the Director of the French Development Agency (AFD) in Santo Domingo, Virginie Díaz Pedregal.
Established by the French Development Agency (AFD), the program is based on the recommendations of the Network for Greening the Financial System (NGFS) to integrate climate risks into financial systems, promote technical assistance and tools, knowledge sharing, and inform and raise awareness among financial actors about climate change and the environment.
Due to its geographic location, the Dominican Republic is highly exposed and severely affected by natural disasters, particularly hurricanes that have intensified in recent years, as well as storms, droughts, and floods that impact the quality of life of the population and sectors vital to the country’s economic development, such as agriculture and tourism.
The European Union has mobilized its Latin America and the Caribbean Investment Facility (LACIF) to launch this program led by the AFD on a regional scale and support major Caribbean banks such as the Bank of Jamaica, the Eastern Caribbean Central Bank, the Caribbean Development Bank, and the Central Bank of the Dominican Republic. The main objective of the initiative is to support the Caribbean region in adapting to climate change and transitioning to low-carbon economies by integrating climate risks into financial system regulation and supervision activities and financing public climate investments.
The donation will allow the implementation of this tailored program of technical assistance, investment grants, and studies. EUR 500,000 will finance the hiring of a consultancy service; and other activities that could include study trips and exchanges with other central banks that have already successfully established climate stress tests and adopted efficient regulatory public policies.
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Central Bank
18 November 2024