Blended Finance for the Transition to Net Zero Carbon Emissions in the LAC Region

To transition to net-zero carbon economies, Latin American countries must mobilize substantial resources in a tight fiscal space. To do this, countries need an effective financing strategy that can bring together the public and the private sectors. Bottomline, countries must have in place effective financial instruments - designed under the umbrella of robust legal and regulatory frameworks - to be able to tap the required amounts of voluntary private sector funding needed in the pursuit of its carbon emissions reduction goal.

Commendable steps in this direction have been taken quite recently. 

• In July 2023, the International Organization of Securities Commissions (IOSCO) endorsed the new international finance reporting sustainability and climate-related disclosure standards proposed by the International Accounting Standards Board (IASB), an essential step towards consistent, comparable, and reliable sustainability information. 
• In August 2023, development banks from the Amazon basin countries launched the Green Coalition for the Amazon, an international alliance mobilized by the Inter-American Development Bank (IDB) and Brazil’s BNDES to carry out collaborative, synergistic and complementary sustainable development of the Amazon region.

This Capstone project will focus on the question of how to finance the necessary investment for the transition to net zero carbon economies in two selected Latin American jurisdictions, namely Brazil and Colombia.