February 24, 2012 No. 8/12-G Reinforced European engagement to support Caribbean Climate Action Caribbean small island states will benefit from new funding and technical assistance for initiatives that reduce the negative impact of climate change and decrease greenhouse gas emissions. The European Investment Bank will provide USD 65m for a dedicated Climate Action lending programme through the Caribbean Development Bank in 18 countries. The lending programme was formally agreed at the European Investment Bank headquarters in Luxembourg by CDB President, Dr. Warren Smith, and EIB President, Dr. Werner Hoyer, during a high-level working visit to strengthen cooperation between the two institutions. The visit included a joint EIB and CDB workshop to discuss partnering for Climate Action in the Caribbean, and exchange of ideas concerning future cooperation with the EIB's Vice President responsible for operations in the Caribbean, Plutarchos Sakellaris. "The European Investment Bank recognises the challenges of a changing climate faced by small island states in the Caribbean. Working closely with the Caribbean Development Bank, will ensure that long-term funding can make a valuable contribution to projects across the region" said Dr. Werner Hoyer, European Investment Bank President. "Dealing with climate change is undoubtedly one of the most critical challenges currently facing the Caribbean and will require considerable resources to be dedicated to its resolution. The Caribbean Development Bank welcomes the opportunity to collaborate with the European Investment Bank in financing eligible climate action projects in its 18 borrowing member countries as well as to benefit from the considerable experience and expertise that EIB has developed in the area." said Dr. Warren Smith, President of the Caribbean Development Bank, The Climate Action lending programme will provide long-term low-cost funding for public and private sector projects that reduce carbon emissions or deal with the effects of predicted changes in the earth's climate. This will be complemented by technical assistance to improve specialist Climate Action expertise and assist preparation of individual initiatives. The European Investment Bank's engagement follows the formal recognition by the European Union of the significant level of investment needed to fund adaptation and mitigation projects in the 2008 Joint EU-Cariforum Declaration on Climate Change. Projects eligible for funding from the new Climate Action lending programme include climate adaptation, renewable energy, sustainable transport, forestry, low-carbon innovation and climate change innovation initiatives. Preliminary studies have identified strong demand for funding of this type to upgrade water and sewage networks to protect them from storm surge and rising sea levels, protect vulnerable transport networks, improve shoreline defences and improve drainage to reduce the risk of hurricane flooding. Countries in the Caribbean are exposed to expected adverse environmental, social and economic effects of a changing climate and more frequent severe weather events. The small size of Caribbean small island states, proximity of the coast to population centres, limited natural resources and economies open to external shocks further increase vulnerability. The European Investment Bank, the European Union's long-term lending institution has worked closely with the Caribbean Development Bank since 1978. This cooperation has included co-financing of electricity supply projects, new airport facilities in Jamaica and Barbados and the funding of small and medium-sized projects and businesses across the Caribbean, as well as partnership under the Caribbean Joint Action Plan.