Equitable and Green Path Development Policy Financing II

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The development objective of the Second Equitable and Green Path Development Policy Financing for Colombia is to support measures that: (i) promote more equitable and green fiscal policies, (ii) establish the institutional framework to increase access to productive assets for vulnerable groups, and (iii) establish non-price incentives to promote climate action. Through these reforms, this operation aims to tackle some of the drivers of inequalities in Colombia (focusing specifically on increasing the redistributive impact of the fiscal system and on promoting the accumulation of land and financial assets among vulnerable groups) and on advancing the climate agenda. In the second phase, the focus shifts to reducing fuel subsidies and strengthening the social protection system, particularly improving instruments for better targeting and responsiveness to shocks that can also lead to fiscal savings. The first pillar focuses on fiscal policy measures. The second pillar supports an institutional framework aimed at the productive inclusion of vulnerable groups by promoting their access to land and financial assets. The third pillar establishes non-price incentives to promote climate action, focusing on preserving strategic ecosystems, supporting cleaner energy production, and the mobilization of private capital.