CDB MDB Challenge Fund Launch Study On Innovative Contingent Capital Facility

2025-06-06 07:03:23

(MENAFN- Caribbean News Global) Bridgetown, Barbados – The Caribbean Development Bank (CDB, the Bank) , and the Multilateral Development Bank (MDB) Challenge Fund , have launched a pioneering feasibility study to design a new Contingent Capital Facility for multilateral development banks. This 12-month pilot project will examine innovative ways to strengthen capital adequacy, enhance lending capacity, and improve CDB's financial resilience.

This initiative is part of CDB's ongoing commitment to financial innovation and to meeting the evolving needs of its borrowing member countries-especially 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. An interim report will be released by September 2025, ahead of the International Monetary Fund (IMF) and World Bank Annual Meetings in October. The final report will be published in advance of the Spring Meetings in 2026.

The initiative aligns with the G20's Capital Adequacy Framework agenda and contributes to broader global efforts to modernise the multilateral development finance system. By investigating the potential of contingent capital instruments, the study underscores a growing trend among MDBs to embrace financial innovation as a tool to boost development impact.

“This partnership represents an important step in our transformation into a more agile and resilient institution,” said Daniel Best, President of the Caribbean Development Bank.“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.”

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 post CDB – MDB Challenge Fund launch study on Innovative Contingent Capital Facility appeared first on Caribbean News Global .

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