Background and Rationale

Small Island Developing States (SIDS) face unique development challenges arising from their geographic isolation, small economies, environmental vulnerability, and high exposure to climate-related risks. These constraints have been further exacerbated by the COVID-19 pandemic, which strained fiscal resources and intensified debt vulnerabilities. In response, the UN Trade and Development (UNCTAD), in collaboration with the United Nations Economic Commission for Africa (UNECA) and the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), launched the project “Mobilizing External Financial Resources Beyond COVID-19 for Greener, More Equal, and Sustainable Development in Selected Vulnerable SIDS in Africa and Latin America and the Caribbean”. The project seeks to build capacities in four beneficiary SIDS – Belize and Saint Vincent and the Grenadines in Latin America and the Caribbean, and Cabo Verde and the Union of Comoros in Africa – to identify climate investment needs, align development priorities with external financing options, and design and implement innovative financing instruments that promote sustainable and climate-resilient development.

As part of Outcome 1 of the project, UNECA and UNCTAD have supported the governments of Belize, Saint Vincent and the Grenadines, Cabo Verde and the Union of Comoros in enhancing their understanding of how to diagnose climate funding gaps and reconcile them with external and public sector financial sustainability in the post-COVID- 19 setting to achieve greener and more equitable societies. To operationalize this effort, an adapted, extended, and enhanced UNCTAD Sustainable Development Finance Assessment (SDFA) framework was adopted to estimate the impact of meeting the 2030 Agenda on developing country external financial sustainability related to climate action (specifically SDGs 17.4 and 13.b).

Guided by an enhanced framework, UNCTAD led data collection field missions, identifying  their  current  and  potential  external  financial  options,  blockages  and impediments to the uptake of innovative financial instruments, as well as the regulatory, institutional, and market-related changes required to encourage these innovations. These efforts culminated in the delivery of climate adaptation and mitigation reports for each country, assessing direct and indirect climate risks and proposing strategies to address these risks and achieve SDGs 17.4 and 13.b and will contribute to the regional discussion.

A regional dialogue was held to present the two primary outputs of Outcome 1 for the beneficiary countries, in Belize and Saint Vincent and the Grenadines: (i) a country study on the regulatory, institutional, and market-related challenges to mobilize climate external financing, including through innovative financial instruments, and how to address them; (ii) a SDFA Report on the climate financial requirements for achieving greener, more equal and sustainable development and more equitable societies while achieving external and public sector financial sustainability. A report incorporating feedback from this dialogue was completed, and individual consultations were held with Belize and St. Vincent and the Grenadines to gather national perspectives. 

A final regional dialogue is now being held to review the final outputs, share the lessons learned, and highlight the usefulness of the financial strategy and roadmap for mobilizing climate financing developed under the project for Belize and St. Vincent and the Grenadines, which could be adapted and used by other countries in the future.

This dialogue will be essential to developing and finalizing tailored national financial strategies and roadmaps to mobilize climate external financing, the two primary output of Outcome 2: Enhancing the capability in beneficiary SIDS to design policies that would enable mobilization of affordable external financial resources for a greener, more equal, and sustainable development without jeopardizing external financial sustainability. These roadmaps will provide a structured plan for mobilizing external finance through innovative mechanisms—such as green bonds, climate funds, blended finance, debt swaps and diaspora instruments—to implement climate-sensitive development goals while maintaining external and public sector financial sustainability.

Objectives

• Present the roadmaps and SDFA reports for Belize and Saint Vincent and the Grenadines.
• Gather and note Stakeholder feedback on the final output
• Facilitate cross-country learning among the Caribbean community, allowing non- beneficiary countries to gain insights from the experiences of Belize and Saint Vincent and the Grenadines and vice-versa.
• Strengthen regional dialogue on climate finance and external resource mobilization for sustainable development.
• Gather practical feedback to develop the national financial strategies and roadmaps, ensuring national ownership and alignment with ongoing initiatives.

Expected Outcomes

• Enhanced awareness and understanding among stakeholders of challenges to adopt innovative finance strategies tailored to SIDS contexts.
• Recommendations to the Financial Strategy and Roadmaps for Mobilizing External Resources in Belize and Saint Vincent and the Grenadines with external and public sector financial sustainability
• Increased regional knowledge-sharing and networking among Caribbean SIDS on sustainable finance practices.
• Strengthened collaboration between UN ECLAC, beneficiary governments, regional peers and the Resident Coordinator Offices.