The Caribbean’s first pooled sustainability bond needs a pipeline

On 7 October, at the Caribbean Investment Forum in Bridgetown, the CARICOM Development Fund launched the Caribbean Sustainability Bond. The issuer is Caribbean Sustainability Investments Limited, a vehicle created for the purpose; the Fund is the sponsor, JMMB Securities is lead arranger and broker, and the framework was built with the Climate Bonds Initiative. It seeks up to US$250 million for climate-resilient infrastructure, renewable energy, water and wastewater, and environmental protection.

The design answers the region’s oldest financing problem. Most Caribbean projects are too small, one by one, for institutional investors. Pooled in one regional issue, under one framework, they reach a size those investors will buy.

The harder problem is what goes into it. Barbados 2035, the government’s own investment plan, puts the funding Barbados needs by 2035 at US$11.6 billion across twelve priorities, from clean water security, at about US$1 billion, to resilient infrastructure, at US$2.5 billion. The Forum’s pipeline, built since 2022, holds about thirty projects from eleven countries worth a little more than US$172 million. And with public debt at 93.7 per cent of GDP, Barbados cannot fill the gap on its own balance sheet.

What would make the bond work

1. Prepare projects to one standard. Each costed, its revenues named, and tied to what it delivers: water connections, megawatts, homes.
2. Pool by sector across islands. Twelve islands’ solar plants in one issue are investable where one is not.
3. Secure the borrowing on revenue. Power sold and water supplied can carry the debt, so it does not sit on the public ledger.

The vehicle now exists. The next issue will be measured by the pipeline behind it, and Barbados, with a priced plan, is the nation best placed to fill it first.