Jamaica, an island nation celebrated for its breathtaking landscapes and vibrant culture, finds itself at the forefront of the global climate crisis. Despite its relatively minimal contribution to global emissions, Jamaica faces some of the most immediate and severe dangers posed by climate change, from hurricanes to sea-level rise, and land erosion.
Amid these challenges, Jamaica is also a land of untapped potential, boasting abundant renewable energy sources, including wind, biomass, and solar energy. Historically underutilized, these resources present a golden opportunity to meet a significant portion of the island’s future energy requirements sustainably.
Recognizing the urgency of these challenges, the COK Sodality Co-operative Credit Union, a leading financial institution in the Caribbean, launched an initiative in 2018 to empower its 275,000 members and the broader Jamaican population to combat the adverse effects of climate change.
The initiative focuses on providing financial solutions for renewable energy and energy efficiency, specifically targeting micro, small, and medium enterprises (MSMEs) and low-income households. By offering loans for solar panel installations and energy-efficient appliances, the initiative aims to enhance the community’s resilience to climate-related disruptions and promote sustainable living practices.
This project was made possible through a collaboration with the IDB Lab and Race to Resilience Partner Initiative, YAPU Solutions, which brought technical assistance and a digital climate risk management system to the table. This system enabled COK Sodality to assess the climate risk of each loan application, ensuring that financial support was directed towards projects that would have the most significant impact on climate adaptation and resilience.
One of the key achievements of this initiative was the development of strong partnerships with over ten solar providers, which facilitated the widespread adoption of renewable energy solutions within the community. Additionally, the project prioritized inclusivity by offering favourable loan conditions, such as reduced interest rates for women, who make up 53% of the borrowers, and using solar panel systems as collateral, making it easier for a broader segment of the population to participate.
To date, the initiative has seen a significant increase in green loans as a percentage of COK Sodality’s portfolio. Looking ahead, the credit union has set ambitious goals to further integrate climate considerations into its business planning and expand its green finance offerings.
YAPU Solutions is a social fintech start up based in Berlin which focuses on “Digital Resilience Finance for the Most Vulnerable” in the Global South.
Image: Wigton Wind Farm via the Development Bank of Jamaica
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