Japan investing US$3b in regional energy projects
Japan is offering up another US$3 billion to finance renewable energy and energy-efficiency projects, and infrastructure projects related to energy savings throughout Latin America and the Caribbean.
This new agreement between the Japan International Cooperation Agency (JICA) and the Inter-American Development Bank (IDB) expands on the
Co-financing for Renewable Energy and Energy Efficiency programme known as CORE, which was created in 2012 as an energy and climate-change initiative.
It adds a new component, the Japan Quality Infrastructure Initiative - JQI - which the IDB refers to as the development bank's "first built-in grant mechanism for a co-financing arrangement".
No other information on JQI was disclosed, but it aligns with a wider initiative by Japan to focus on 'quality infrastructure'. Last year, Japan signed an agreement with the Asian Development Bank - the Partnership for Quality Infrastructure - under which it will invest US$110 billion over five years in Asian projects.
The initial target for CORE when it launched four years ago was US$300 million for Caribbean and Central America projects. It was later expanded in 2014 to US$1 billion.
This extended agreement now triples JICA's sponsorship of CORE to US$3 billion - funds to be deployed up to year 2021.
"This will also broaden CORE's geographical reach, enabling partners to fund projects in all low- and
middle-income IDB borrowing member countries, as well as more vulnerable Caribbean economies not previously covered by the programme," IDB said in a joint release with JICA.
Vehicle for change
The pact with the IDB allows Japan to export its technology and expertise to the region.
"We believe the expanded programme can serve as a vehicle for accelerating the establishment of quality infrastructure in Latin America and the Caribbean, generating positive long-term impacts of economic, environmental, and social importance," said Japan's State Minister of Finance Manabu Sakai in the joint release.
"Its expansion will not only broaden its geographical reach, but bolster the region's infrastructure efforts by reinforcing the importance of the sector. Japan is very much looking forward to continuing the transfer of its technology and experience to the region as a means of advancing sustainable development," he said.
The development bank says so far, some US$800 million of the JICA funds, leveraged by IDB loans, have been deployed under CORE. Some of the beneficiary projects include renewables in Nicaragua and Honduras, and ongoing efforts to develop geothermal energy in Costa Rica and the eastern Caribbean.