As a development bank 'with a difference', Banco del Sur (Bank of the South), seeks to break away from traditional bank business and promote innovative approaches to tackling today's development challenges. Banco del Sur sees development as an issue of sovereignty and has made achieving regional sovereignty in terms of food, energy, healthcare and natural resources its ultimate goal. It stands out from the crowd as being the only regional financial institution to have made natural resource management and combating land degradation a strategic priority.
Founded in December 2007, Banco del Sur fosters the economic and social development of countries belonging to the Union of South American Nations (UNASUR) - Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Uruguay and Venezuela by promoting South American integration in the framework of a new regional financial architecture that will enjoy a stable, regional monetary system and its own currency and will no longer be dependent on international finance. Its anticipated portfolio for the first 10 years is around USD 20 billion. These funds will come exclusively from the region and will be utilized in the region. Non-lending mechanisms will be the Bank's 'quality stamp'.
The GM's partnership with Banco del Sur has its origins in the international workshop "Environment and the New Regional Financing Architecture" held in Quito, Ecuador in August 2009, at which the GM brought home the urgent need for investment in sustainable land management (SLM) as a prerequisite for regional development. As a result, the Technical Presidential Ecuadorian Commission of Banco del Sur decided to give greater prominence to land degradation and desertification and asked to provide technical assistance on financial instruments and mechanisms for increasing investments in combating land degradation and on South-to-South cooperation.
As part of its support, the GM co-organized a dedicated SLM workshop to share its experiences of promoting and spearheading regional financial platforms and initiatives in other regions of the world, with a view to supporting the Presidential Ecuadorian Commission of the Banco del Sur in structuring a regional platform for investments and co-finance to reverse land degradation. The workshop held in Quito in May 2010 was an excellent opportunity for the GM to share its experiences deriving from the Investment Platform for Sustainable Land Management in Mesoamerica (PIMAST), the Central Asian Countries Initiative for Land Management (CACILM), and similar initiatives with representatives from the Ministries of Finance, Agriculture, and Environment of Ecuador, local financial institutions, members of the Bank, academics and civil society.
The Bank and the GM are currently working together to identify a flagship initiative in affected areas of Peru and Ecuador where Banco del Sur will galvanize financial support for SLM through trust fund instruments to make the case for increased investments in SLM, before the Bank going fully operational.
As Banco del Sur moves into its operational phase, the GM will be supporting the Technical Commission in identifying criteria for selecting the most appropriate sources of finance and ways of managing funds.
This is the first time the GM has had the opportunity to impact on a new bank's operations and advise on its SLM portfolio – an exciting and important responsibility.
For more information:
Mr Alejandro Kilpatrick, Programme Coordinator, Latin America and the Caribbean and the Climate Change Finance Programme
Tel. +39 06 5459 2524
a.kilpatrick (at) global-mechanism.org
Ms Ines Chaâlala, Junior Advisor, North Africa & South-to-South Cooperation
Tel. +39 06 5459 2548
i.chaalala (at) global-mechanism.org