Increasingly strong ties with the Caribbean

In July 2023, CAF marked a milestone in its history by announcing the integration of the Caribbean into its identification, renaming itself "development bank of Latin America and the Caribbean". The institution, created in 1970 by six Andean countries, thus officially became an institution of enormous scope, now made up of 22 Latin American and Caribbean (LAC) countries, Spain and Portugal, and 13 private banks in the region.

The word "officially" should be emphasized, given that CAF's links with the Caribbean date back to its beginnings, because two of its founders -Colombia and Venezuela- are also Caribbean countries, several other continental Caribbean states became members over time, and more than 30 years ago Trinidad and Tobago joined the bank as the first Caribbean island country to become a Series C shareholder. In 1999, Jamaica followed suit; in 2004, the Dominican Republic, and in 2014, Barbados.

A year later, CAF -development bank of Latin America and the Caribbean- changed its constitutive agreement to allow other LAC countries to become full members, which Trinidad and Tobago took advantage of to advance to that level in 2016 after a four-year process. As of 2021, the Dominican Republic is also a full member.

The insular Caribbean region, home to nearly 45 million people, has been highly responsive to CAF's strategy to link it to its purpose of integration and sustainable development, and has played an important role in strengthening CAF as a financial institution. Proof of this is that, at the bank's March 2022 meeting, Trinidad and Tobago and Barbados joined other shareholder countries in pushing for a historic $7 billion recapitalization.

CAF established an office in Port of Spain nearly 13 years ago, which a decade later became the CAF Regional Management Office for the Caribbean, with a manager at the helm, to deepen its commitment to the region by promoting CAF to potential new shareholder countries, as well as expanding operations, technical assistance and knowledge-sharing initiatives with governments, the private sector and other development partners in the Caribbean.

More specifically, support was directed to key issues such as climate action, biodiversity preservation, water, energy and food security. It also focused on sustainable tourism, infrastructure modernization, digital transformation and the pursuit of financial stability.

Following the opening of that regional delegation in Port of Spain, eight more Caribbean Community of Nations (Caricom) states formally expressed interest in becoming CAF shareholders.

In March 2024, CAF's Board of Directors, meeting for the first time in Punta Cana (Dominican Republic), authorized the expansion of the shareholder base and validated the incorporation of the Bahamas, Dominica and Grenada as Series C shareholders. In July, in Lima, Peru, it approved the incorporation of Antigua and Barbuda.

The Government of the Bahamas officially completed the process a few months ago, which will mean for that country, as for all countries, access to the organization's technical and knowledge services, specific donation funds for project preparation, as well as flexible and agile financing.

CAF will continue to expand its presence in the Caribbean, with significant support to the Small Island Developing States (SIDS) of the Caribbean, which, by the way, face strong vulnerabilities to the effects of climate change, which are expressed with the intensification of hurricanes, rising sea levels and economic crises.

An example of CAF's actions for the Caribbean is the support provided to the Government of the Bahamas to organize in 2023 a regional meeting on climate finance in the Americas within the framework of the Fourth Ministerial Meeting on Sustainable Development convened by the Organization of American States (OAS).

Another concrete development is CAF's US$15 million contribution to the Blue Green Bank (BGB), a project led by Barbados. The new entity, whose mission is to support specific proposals that lead to climate change mitigation and adaptation, is part of the Bridgetown Initiative, which seeks to transform the financial support provided to poor countries to address this challenge.

"As a development partner rooted in the region, we understand the unique challenges faced by Caribbean small island developing states and the urgency of addressing the effects of climate change, financial constraints and the need for greater investments in connectivity and resilient infrastructure," said CAF Executive President Sergio Diaz-Granados in announcing the Bahamas' membership.

CAF's expansion in the Caribbean will make it the largest development bank in Latin America and the Caribbean.