Supporting LAC countries to mobilize private sector carbon finance

pipeline

This proposed Investment Project Financing (IPF) operation aims to enhance the capacity of participating Latin America and Caribbean (LAC) countries to effectively monetize carbon credits generated through different projects including World Bank-supported operations (e.g. FCPF, ISFL, others). By strengthening institutional, legal, and technical frameworks, the project will enable countries to access and benefit from private sector carbon finance, thereby supporting the sustainable development objective including sustainable job creation. The operation will provide targeted support to government agencies and relevant stakeholders in participating countries, focusing on:- Clarification of institutional arrangements for country participation in carbon market transactions;- Operationalizing key carbon market and Article 6 tools to enable the issuance of Letters of Authorization;- Providing 'last mile' transaction support to enable transaction of carbon credits;- Supporting knowledge exchange and regional collaboration to promote best practices and innovation in carbon finance.Through these interventions, the project seeks to unlock new sources of private sector finance, strengthen country ownership in accessing sustainable debt-free financing streams, and contribute to the achievement of national and regional sustainable development goals. The operation will be closely aligned with World Bank priorities including creation of sustainable economic opportunities and job creation. The operation will use a Recipient-Executed small grant to a recipient/grantee and then this grantee could execute those funds and deliver the project activities or also hire firms to cover some of the activities is not able to deliver directly (e.g. legal transaction advice).