Ear­li­er this year, the Caribbean Com­mu­ni­ty Re­silience Fund (CCRF) was an­nounced in Bar­ba­dos.

Sygnus Group, the Ja­maican al­ter­na­tive in­vest­ment com­pa­ny, was dis­closed as the fund man­ag­er of the CCRF at the in­sti­tu­tion's of­fi­cial launch on Jan­u­ary 26, 2024.

The CCRF, which is val­ued at US$135 mil­lion, is a 10-year im­pact in­vest­ment fund which aims to de­ploy cap­i­tal in­to crit­i­cal sec­tors.

These sec­tors in­clud­ed re­new­able en­er­gy, blue econ­o­my, sus­tain­able hous­ing, ICT, trans­port, fi­nan­cial ser­vices, and cli­mate-smart agri­cul­ture. The fund fea­tures two port­fo­lios: eq­ui­ty and debt (EBT).

Mere weeks af­ter the Ja­maica leg of the fund’s launch in May, Hur­ri­cane Beryl’s im­pact across sev­er­al Caribbean states un­der­lined the fund’s im­por­tance.

Jus­tine Pow­ell, as­sis­tant vice pres­i­dent of In­vest­ment Man­age­ment, at Sygnus ex­plained, “The CCRF was cre­at­ed to ad­dress some of the chal­lenges that we face in the Caribbean, as it re­lates to cli­mate and eco­nom­ic re­silience. And it’s not just a one-coun­try thing. It’s right across the re­gion, we have these chal­lenges that we have to com­bat. So it’s no se­cret that in the Caribbean, de­spite our size, we’re one of the more vul­ner­a­ble re­gions in the world when it comes to cli­mate shocks. “

She not­ed that Hur­ri­cane Beryl, and the loom­ing con­cern that this rainy sea­son is pro­ject­ed to be among the worst ever record­ed. were fur­ther signs that the Caribbean is about to bear the brunt of cli­mate change’s im­pact.

“It’s un­for­tu­nate, es­pe­cial­ly when you con­sid­er what we con­tribute in ag­gre­gate to green­house gas emis­sions and what we con­tribute to car­bon­i­sa­tion rel­a­tive to the globe,” she said.

“So we see the ris­ing sea lev­els, we see the stronger hur­ri­canes. We had Beryl just a few weeks ago tear­ing us apart. We see more fre­quent earth­quakes. We al­so see ris­ing tem­per­a­tures. So many ex­am­ples of how we’ve been at the fore­front of the im­pact of cli­mate change.”

The fund is be­ing seen as a re­source to aid Caribbean coun­tries in di­ver­si­fy­ing their eco­nom­ic base and in the process give them more op­tions to re­main sta­ble in the face of these shocks.

This re­al­i­ty be­came es­pe­cial­ly ap­par­ent dur­ing the COVID-19 pan­dem­ic when sev­er­al tourism-de­pen­dent Caribbean coun­tries were ad­verse­ly af­fect­ed as that sec­tor all but ground to a halt.

“We tend to have economies that are large­ly de­pen­dent on a sin­gle sec­tor. So for ex­am­ple, you may have a coun­try where the econ­o­my re­lies heav­i­ly on tourism, or it re­lies heav­i­ly on agri­cul­ture. And what that means is that it makes us even more vul­ner­a­ble when we have these shocks be­cause we don’t have a di­ver­si­fied econ­o­my,” said Pow­ell, in a web in­ter­view with the Busi­ness Guardian.

“The in­vest­ments that we’re go­ing to be do­ing, they’re go­ing to be geared to­wards two main as­pects: There’s go­ing to be cli­mate re­silience, and there’s go­ing to be eco­nom­ic sus­tain­abil­i­ty. So that’s es­sen­tial­ly what we’re try­ing to achieve with the fund.”

Pow­ell added, “There are some tar­gets or key sec­tors that we plan to de­ploy this cap­i­tal in­to. For ex­am­ple, re­new­able en­er­gy is one. Cli­mate Smart Agri­cul­ture is an­oth­er one. There is ICT, there’s fi­nan­cial ser­vices. The blue econ­o­my is an­oth­er one. Trans­porta­tion is al­so one. So those are some of the key sec­tors in which we plan to de­ploy cap­i­tal.”

T&T is poised to ben­e­fit from the CCRF along with Cari­com states Ja­maica, Bar­ba­dos, An­tigua and Bar­bu­da, Grena­da, St Lu­cia, Be­lize, Guyana, St Vin­cent and the Grenadines, Suri­name, Do­mini­ca, St Kitts and Nevis, Ba­hamas, and the Do­mini­can Re­pub­lic.

Pow­ell said T&T is al­ready home to some of the key po­ten­tial in­vestors for the fund, and she ex­plained the fund can al­so aid T&T in achiev­ing goals with fund­ing not con­nect­ed to the en­er­gy sec­tor.

“Based on how the fund is de­signed, T&T will be in a po­si­tion to ben­e­fit from in­vest­ments in both sub funds. Whether it’s a debt in­vest­ment or eq­ui­ty in­vest­ment, T&T is an op­tion,” she said.

“Trinidad is more known for its large re­serves in pe­tro­le­um and nat­ur­al gas. At the same time, they al­so have sus­tain­abil­i­ty goals that they’re try­ing to meet. I know one of them is achiev­ing 20 to 30 per cent elec­tric­i­ty from re­new­able sources by 2030. They would have been a part of the Paris Agree­ment as well. This fund, the CCRF is ac­tu­al­ly an op­por­tu­ni­ty for Trinidad and To­ba­go to get clos­er to those sus­tain­abil­i­ty goals that they have set out to achieve.”

She said some of these in­vest­ments, for ex­am­ple, could be in wind and so­lar farm projects which have been time­lined in T&T re­cent­ly.

She added that she was par­tic­u­lar­ly en­thu­si­as­tic about the fund’s po­ten­tial de­vel­op­ment of the blue econ­o­my, which she felt had mas­sive po­ten­tial giv­en the re­gion’s re­sources. 

“When we say blue econ­o­my, we’re talk­ing about the use of our ocean re­sources. So a lot of times peo­ple may think it’s lim­it­ed to just fish­ing. But, for ex­am­ple, if you do ma­rine or are in the ma­rine in­dus­try, you will be el­i­gi­ble to get some of the debt cap­i­tal or eq­ui­ty cap­i­tal from the CCRF. What you find with these types of in­vest­ments, the blue econ­o­my, for ex­am­ple, tends to be very re­source in­ten­sive,” said Pow­ell.

The CCRF rep­re­sents a col­lab­o­ra­tive ef­fort by the Cari­com De­vel­op­ment Fund (CDF), Sygnus, US­AID, Cross Bound­ary, and the Rocky Moun­tain In­sti­tute (RMI) Is­land En­er­gy Pro­gram. The CCRF an­tic­i­pates an ini­tial cap­i­tal in­jec­tion of US$20 mil­lion, com­pris­ing con­tri­bu­tions from CDF and Sygnus.

“We have the Cari­com De­vel­op­ment Fund, which you could say is the main spon­sor. What these an­chor in­vestors have done is that they have pro­vid­ed us with cap­i­tal that we con­sid­er to be pa­tient cap­i­tal, which is cap­i­tal that we con­sid­er to be con­ces­sion­al cap­i­tal and cap­i­tal that we con­sid­er to be first-loss cap­i­tal,” said Pow­ell.

“Now when they say pa­tient cap­i­tal, what we’re ba­si­cal­ly say­ing is that the an­chor in­vestors are so con­fi­dent in the fund man­ag­er’s abil­i­ty to de­liv­er on the man­date of the fund that they’ve said, Hey, I’m go­ing to put my cap­i­tal in first, but I’m go­ing to take my cap­i­tal last.”

Pow­ell said the CCRF was now work­ing on get­ting more in­vestors on board and had al­ready be­gun talks around the Caribbean, in­clud­ing dis­cus­sion with T&T busi­ness­es con­cern­ing in­vest­ing.

“We would have been hav­ing those dis­cus­sions that gen­er­al­ly in­clude a lot of due dili­gence. They want to find out who’s go­ing to be man­ag­ing the fund and what is their track record like. They want to know the team that is han­dling all this mon­ey on be­half of in­vestors. In ad­di­tion to that, we have been build­ing out a very ro­bust pipeline,” she said.

That pipeline, Pow­ell said is cur­rent­ly is at about US$250 mil­lion and she as­sured the CCRF will look to de­ploy cap­i­tal in­to in­vest­ments that will serve to strength­en the Caribbean econ­o­my in the long run.