BASSETERRE, St. Kitts, CMC – The St. Kitts-based Eastern Caribbean Central Bank (ECCB) says it has signed a memorandum of understanding (MOU) with the Agence Française de Développement (AFD) to assist with incorporating climate-based financial risk management in the supervision and regulation of the Eastern Caribbean Currency Union (ECCU) economic system.
The French-based AFD says it has carried out more than 4,000 projects in France’s overseas departments and territories and 115 other countries, contributing to France’s commitment to supporting the Sustainable Development Goals (SDGs).
ECCB Governor Timothy N. J. Antoine and AFD Senior Investment Officer Lionel Lecrinier signed the MOU that the bank said represents another step towards greening the ECCU financial system and the ECCB’s fulfillment of its mandate to maintain regional economic stability.
“Climate risk is financial risk. Therefore, we are very pleased to partner with the AFD concerning cooperating in this vital area. This initiative benefits regulators across the currency union. On the heels of COP 28, we want to continue to send a powerful message about the necessity for ambitious and urgent action globally concerning the climate,” Antoine said.
Lecrinier said that the assets in the ECCU financial system were at risk due to the consequences of climate change and that the financial system was bearing transition risks.
He said that while the region’s financial system was exposed to risks, there were opportunities, noting that renewables and climate-smart agricultural equipment were emerging sectors and part of the green economy.
“Through the MOU, the AFD and the European Union are providing funding to assist the ECCB and national regulators in the ECCU with integrating climate-related financial risk management in their supervision tools. The project also aims to increase the path to green financing and loans,” the ECCB said.
It said that the technical assistance provided through the agreement will seek to build capacity amongst regulators and financial institutions on the importance and impact of potential climate-related financial risks and how to assess and monitor those risks. The collaboration will also support regional governments’ adoption of adequate regulations to mitigate climate-related risks.
The ECCB serves as a central bank for the islands of Antigua and Barbuda, Dominica, Grenada, St. Lucia, St. Vincent and the Grenadines, and St. Kitts-Nevis. At the same time, the ECCU members are Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St.Kitts-Nevis, St.Lucia, and St.Vincent and the Grenadines.
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