New Regional Sustainability Bond Targets US$250Mn

• The CARICOM Development Fund (CDF) has launched the Caribbean’s first regional sustainability bond, targeting US$250Mn to finance growth and climate-resilience projects across the region. The bond was unveiled at the Caribbean Investment Forum in Barbados and is expected to reach the market no later than Q1 2027, with JMMB Group serving as arranger.
• The bond will be issued through Caribbean Sustainability Investments Limited, a special-purpose vehicle, and is intended to attract traditional and non-traditional sources of capital, including sovereigns, multilateral development banks, regional and international financial institutions, institutional investors and individual Caribbean investors.
• Financing is expected to be raised at concessional or below-market rates, targeting impact investors willing to accept more affordable returns in exchange for the social, environmental and economic benefits generated by the projects. The structure is intended to help governments finance resilience projects without worsening already-high debt burdens.
• Proceeds will support climate-resilience projects, including renewable energy and coastal protection; economic diversification through areas such as new technologies, sustainable agriculture and sustainable tourism; and community-focused projects. The CDF will also establish a joint project-preparation facility with Afreximbank to help develop investment-ready projects.
• The regional approach is intended to address the Caribbean’s lack of scale in accessing global capital by pooling eligible projects under a single financing framework rather than taking numerous smaller transactions to market. JMMB noted that investors can face similar evaluation, structuring and monitoring costs whether a transaction is US$5Mn or US$100Mn, making larger aggregated opportunities potentially more attractive.
• The Climate Bonds Initiative, an international organisation working to mobilise global capital for climate action and resilience, will help determine which projects qualify for financing, with projects required to contribute meaningfully to climate adaptation and resilience without creating significant environmental harm or additional vulnerabilities. The initiative follows the CDF’s Caribbean Community Resilience Fund, a blended-finance vehicle targeting US$100Mn–US$135Mn.
• The bond could help address two persistent barriers to Caribbean climate investment: limited fiscal space and the relatively small scale of individual projects. Pooling projects across countries could make regional opportunities more attractive to institutional and impact investors while potentially lowering financing costs.

(Source: Barbados Today)