The Caribbean Development Bank is set to significantly boost the amount of money it can lend across the region after its Board of Directors approved a new US$200 million guarantee backed by the Government of Canada.

The guarantee, which was approved during the bank’s 56th Annual Meeting in The Bahamas, is expected to unlock up to US$400 million in additional financing for projects across the Caribbean.

The arrangement was first announced by Canada at the 2025 G7 Leaders’ Summit in Kananaskis and is being viewed as a major step in helping the bank stretch its lending capacity at a time when Caribbean countries are facing growing demands for climate resilience, infrastructure upgrades and economic development.

CDB President Daniel Best described the initiative as a transformational milestone for the institution.

“This is an important step towards the agreement that will enhance our ability to deliver on our mandate at a critical time for the Caribbean,” Best said on the sidelines of the annual meeting.

“It allows us to increase investment in resilience, opportunity and economic development while safeguarding the Bank’s financial strength.”

The guarantee works by reducing some of the risk on the bank’s existing portfolio, freeing up capital that can then be used to support new lending throughout the region.

Officials say the additional financing capacity will be directed toward projects focused on climate action, sustainable infrastructure, regional integration and economic growth.

Philippe Hall said Canada’s support reflects its commitment to helping Caribbean countries build resilience and advance sustainable development.

“The Government of Canada’s support underscores its commitment to support reforms and innovations among Multilateral Development Banks for advancing sustainable development and strengthening resilience in Caribbean Small Island Developing States,” Hall said.

The agreement also forms part of a broader international push to strengthen multilateral development banks and increase their ability to respond to development challenges, particularly in vulnerable regions such as the Caribbean.