BRIDGETOWN, Barbados, CMC – The Barbados-based Caribbean Development Bank (CDB) on Friday said it has launched a pioneering feasibility study to design a new Contingent Capital Facility for multilateral development banks.
“This partnership represents an important step in our transformation into a more agile and resilient institution,” said CDB president Daniel Best.
“The study will allow us to proactively explore solutions that can increase our financial flexibility and ensure that we remain responsive to the diverse and dynamic challenges facing the Caribbean,” he added.
The CDB stated that the initiative is being undertaken in collaboration with the Multilateral Development Bank (MDB) Challenge Fund and that this 12-month pilot project will examine innovative ways to strengthen capital adequacy, enhance lending capacity, and improve the CDB’s financial resilience.
The region’s premier financial institution stated that this initiative is part of CDB’s ongoing commitment to financial innovation and meeting the evolving needs of its Borrowing Member Countries (BMCs), particularly during times of economic volatility and uncertainty.
The study is supported by the MDB Challenge Fund, a coalition comprising the Rockefeller Foundation, the Bill & Melinda Gates Foundation, and the Open Society Foundations.
CDB’s Facility design partners are Cantium, Ardhill Advisory, and Linklaters.
The bank stated that an interim report will be released by September 2025, ahead of the International Monetary Fund (IMF) and World Bank Annual Meetings in October, with the final report scheduled for publication in advance of the Spring Meetings in 2026.
The CDB said that the initiative aligns with the G20’s Capital Adequacy Framework agenda and contributes to broader global efforts to modernize the multilateral development finance system.
The study highlights that investigating the potential of contingent capital instruments underscores a growing trend among multilateral development banks (MDBs) to embrace financial innovation as a tool to enhance development impact.
The study is a key component of CDB’s strategy to future-proof its financial framework and expand its ability to deliver high-impact development solutions across the Caribbean, the bank said.
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