US$383 million replenishment for CDB fund to reduce regional poverty, inequality

The Caribbean Development Bank’s (CDB) board of directors has endorsed a US$383 million programme for the 10th cycle of the bank’s Special Development Fund (SDF). The programme is designed to reduce poverty and inequality, as well as transform the lives of citizens of borrowing member countries (BMCs).

The SDF represents the principal pool of concessional resources available to the bank to assist BMCs in addressing poverty, sustainable development, governance, capacity development, gender inequalities, environmental sustainability, climate change, disaster risk management, and regional cooperation and integration. Established in 1970, the fund is a unique partnership among the bank’s stakeholders with both borrowing and non-borrowing members contributing to its resources.

With support from CDB and other development partners, BMCs have been making consistent efforts over the past two decades to reduce poverty and inequality. However, pressing development challenges persist and the ongoing COVID-19 pandemic has undermined some of the socio-economic gains achieved, the CDB said.

“A key concern for the Special Development Fund over this cycle will be the need to respond meaningfully to the challenges of poor and vulnerable groups whose conditions have been made worse by the COVID-19 pandemic. The priority will be a focus on developing social resilience by building the capacity of individuals, communities and countries so that they are prepared for shocks, and can cope when they do occur,” CDB President Dr William Warren Smith said.

Member countries have pledged to contribute US$188.2 million to the SDF for the period 2020-2024, while the bank has allocated US$162.8 million from internal resources, such as loan repayments.

The remaining gap in the programme funding of US$32 million is expected to be provided by existing and prospective contributors. About two-thirds of the fund will be used for concessional loans to BMCs with the remainder will be allocated to grants.

The top five contributors to SDF 10 are: Canada, the United Kingdom. Germany,  Jamaica and Trinidad and Tobago .

“The impact of COVID-19 has put tremendous stress on social protection systems that were already challenged to respond to the needs of the poor and vulnerable. The bank welcomes the sustained commitment of the contributors to the Special Development Fund. Through this solid partnership, CDB can continue to lift people out of poverty and support countries in the recovery phase,” Smith said.

To tackle the fall-out of the pandemic and make further development gains, the overarching goal of SDF 10 is to assist BMCs to reduce poverty and inequality, and to transform the lives of BMC citizens consistent with the Sustainable Development Goals across four cross-cutting themes, namely gender equality, good governance, digitalisation, and regional cooperation and integration run through these pillars.

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