Wednesday, 18 June 2014

CDB to engage more directly with private sector

THE Caribbean Development Bank (CDB) has been exploring new and different avenues to reach the private sector in borrowing member countries (BMCs).

In fact, Dr. Warren Smith, President of the CDB, recently told the 44th annual meeting of the Board of Governors that the CDB is in the process of revising its private sector policy and strategy to support new initiatives in private sector development and operations.

“Having strengthened its risk management framework, CDB now sees an opportunity to engage more directly with the private sector by working with other institutions, like the International Finance Corporation, in order to expand its private sector portfolio.”

He noted that interest in public-private partnerships (PPPs) as a mechanism to fund social and economic infrastructure projects has been growing.

“Early experiences have been mixed; and costly mistakes have been made,” he pointed out.

“CDB will continue to strengthen its internal capacity for private sector financing, as well as capacity within the BMCs to foster successful PPP ventures in the future,” he said.

The CDB president also acknowledged that many Governors during the meeting commended the Bank for securing the upgrade of the outlook on its credit rating from ‘negative’ to ‘stable’.

“This achievement was the result of the comprehensive team effort deployed by CDB’s staff to provide credible responses to the queries of the rating agency concerning the key risk issues, both within CDB and BMCs. Of special note is that the improvement in the outlook was accomplished, despite several of the Bank’s BMCs being downgraded during the same period.

“Also, many Governors commended the Bank for the significant progress made in improving its risk management framework, and acknowledged its role in the removal of the negative outlook on the credit rating.

“Going forward, we will continue to manage carefully the delicate balance between our development mandate and the need to act in a manner consistent with the Bank’s risk tolerance,” he assured. (TL)

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