Spotlight: the IDB's electromobility projects

The IDB tells BNamericas that it will continue to help electromobility projects get off the ground to boost the use of electric vehicles in Latin America. 

As the largest source of development financing and technical assistance for the region, IDB is working to develop national EV strategies, policies, fiscal incentives, and the regulatory framework and business models for rolling out charging infrastructure and electric bus fleets.

“For instance, we’re working in the south region of Brazil at the request of the government” on a study to determine the necessary conditions to roll out an electromobility program, says Tomás Serebrisky, principal economic advisor for infrastructure, development finance and regulation at IDB. Similar support is being given to Barbados.

“On the more operational side, we’ve been doing some pilots just to show the advantages of electromobility,” he adds in an interview with BNamericas. “We’ve been working with Costa Rica, which has a very ambitious decarbonization plan, [in which one] pillar is electromobility.”

There IDB has been providing technical assistance and helping Costa Rican state-owned power company CNFL to finance the development of a public sector fleet of electric vehicles and eventually a nationwide network of charging stations, Serebrisky adds.

Elsewhere in the region, Colombia has purchased hundreds of electric buses for Bogotá’s Transmilenio BRT service after an IDB pilot program that began years ago. Similar progress has been made with the government of Chile, resulting in a fleet of electric buses recently purchased for capital Santiago.

In addition, it has approved lines of credit for electric vehicle financing in Peru (US$20mn in blended funding from IDB and the Clean Technology Fund) and Ecuador (US$33mn in blended finance).

IDB also recently released a report (available here) on the potential for electrification of ferries in the region, indicating that more than 15 ferry routes could be electrified. The multilateral is currently working with partners to study the feasibility of such projects.

“We are coordinating efforts with our partners (such as the [French development agency] AFD, the UN and others) and various climate investment funds to continue seeking additional opportunities to blend finance,” IDB said in an additional comment provided to BNamericas.  

In Jamaica, thanks to a US$1.5mn grant from the Japanese government, IDB and the bank’s innovation arm IDB Lab are supporting the government with establishing the following criteria: 

(i) the strategic framework with fiscal strategies and regulatory guidelines for charging stations, (ii) raising public awareness and providing local capacity building and training programs for institutions to strengthen the ecosystem, (iii) integrating six BEVs (battery electric vehicles) into the private and public sector to assess the feasibility of electrifying their fleet and business model, as well as feasibility studies of battery, recycle and vehicle-to-grid (V2G) interconnection; and (iv) technical design for an EV fund.

By electrifying 12-16% of its private and public fleets, said IDB, the Jamaican economy could benefit from nearly 2 additional percentage points to its GDP and reduce CO2 emissions by 3Mt while maintaining tax neutrality over the 10-year timeframe.  

Green finance

The development bank’s investment arm, IDB Invest, is more engaged with financing private-sector projects, such as solar and wind energy, with the central IDB entity playing more of a technical assistance role.

“These days I can’t think of a single energy project where it’s not fully aligned with decarbonization,” says Serebrisky, adding that alignment to key climate initiatives will only become more crucial to IDB’s financing strategy.

With respect to the carbon and environmental impact of IDB and IDB Invest projects, Serebrisky says mechanisms are already in place to measure the impact through the lifetime of the project. 

“With roads the link is not 1-to-1 clearly, and you can argue that roads contribute to more emissions, but the other dimension that is very important is on resilient infrastructure … on adaptation to climate change,” he says, adding that every project at IDB will have a strong emphasis on adaptation, making sure the infrastructure is resilient.

“And, of course, we have the impacts that go beyond decarbonization,” he added. “We have new, more stringent ESG policies.”