Inter-American Development Bank

Energy efficiency strategy, standards and investment

This page is part of the E3G Public Bank Climate Tracker Matrix, our tool to help you assess the Paris alignment of public banks, MDBs and DFIs.

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Paris alignmentReasoning
UnalignedVery few energy efficiency standards, with transport being the only exception.
Overarching energy efficiency first strategy/principle
There does not appear to be an overarching energy efficiency first principle applied to key infrastructure sectors.
Transport energy efficiency Building energy efficiencyFinancial intermediary energy efficiency
Commitment to support transport projects aligning with NDCs. Projects cover the “Avoid-Shift-Improve” approach and a general prioritisation is given to upgrading existing infrastructure.Meets national standards for energy efficient buildings.No energy efficiency standards included for intermediaries.

Explanation

Transport

The IDB aims to “Contribute to rationalization of the consumption of energy, promoting especially the saving of energy generated with non-renewable resources.” The IDB also states there is general prioritization regarding which transport projects are financed, which broadly apply to most transport subsectors apart from urban transport, which is treated differently. This general prioritization can differ depending on the county specifics but follows the below order:

  1. Institutional strengthening (training to personnel, sectoral studies, regional integration planning and final project design).
  2. Rehabilitation or maintenance of existing transport infrastructure, focusing on prolonging the useful life and service efficiency of infrastructure and equipment.
  3. Construction of new infrastructure or purchasing new equipment.

For urban transport the IDB states that “in general, the Bank will encourage mass transportation systems to provide better and more facilities to users, rationalize services, encourage the saving of fuel, and minimize pollution”.

Buildings 

At a minimum the IDB appears to follow national energy efficiency standards for new buildings or renovated buildings.  It has also launched the ENERFLIX platform to train Brazilian municipalities to develop energy efficiency and distributed management projects.  

Recommendation: The IDB should implement standards in this area similar to best practice amongst the other MDBs.

Financial intermediaries

The IDB does not appear to require financial intermediaries to follow energy efficiency standards.

However, the IDB has developed innovative instruments in this area. One example is the Energy Savings Insurance (ESI) programme developed by the Inter-American Development Bank  (2020) Energy Savings Insurance. This provides insurance for projected energy savings in SMEs using local insurers and international reinsurers. In Colombia, this was implemented through a commercial bank and in Mexico through a public trust. E3G understands that IDB Invest applies a 20% reduction as a covenant within the contracts with clients when using blended finance resources for performance based loans but does not have a documented source for this.

Industry

E3G intends to expand this metric to include industrial energy efficiency in the future.

 

Last Update: November 2020

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