Draft Caribbean Development Bank (Eleventh Replenishment of the Special Development Fund (Unified)) Order 2026
(1 day, 10 hours ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Chris Elmore)
I beg to move,
That the Committee has considered the draft Caribbean Development Bank (Eleventh Replenishment of the Special Development Fund (Unified)) Order 2026.
It is a pleasure to serve under your chairship, Ms Jardine, I think for the first time. The draft order will permit the UK Government to make financial contributions to the special development fund of the Caribbean Development Bank up to the stated values.
The Caribbean region is important to the United Kingdom, and our history and values are closely intertwined. Twelve of the 53 Commonwealth states are in the region, along with five out of the 14 UK overseas territories. There is a large Caribbean diaspora in the UK, and a significant number of British nationals visit as well as reside in the Caribbean. The Caribbean has strong economic links to the UK, and the UK was the destination for almost 10% of Caribbean goods exports in 2025. Although small in population size, countries in this region have a significant voice on global issues and in international organisations, including the United Nations. We have shared interests in areas such as tackling climate change, global financial system reform, combating crime and violence, and fostering trade and inclusive economic development.
The Caribbean Development Bank, or CDB, is the sole multilateral development bank that is exclusively focused on the Caribbean region, providing more than $312 million in 2024. The UK has a long-standing partnership with the CDB. We were one of the founding members and are the joint largest non-regional shareholder, with a 9.3% shareholding. The CDB plays a key role in the achievement of the UK’s regional development objectives of supporting sustainable development and tackling the impact of climate change.
Allow me briefly to take the Committee through the background and the purpose of the draft order. The special development fund, or SDF, is the consensual arm of the Caribbean Development Bank, which provides loans and grants to the most vulnerable countries in the region. It aims to reduce poverty, support human development, and strengthen climate and economic resilience across the Caribbean. It is replenished by donors every four years, and contributions to the fund come from regional and non-regional member countries of the Caribbean Development Bank, as well as from non-members. In line with our strategic shift towards multilateral assistance, the UK will commit up to £21 million to the SDF to maintain our position as the second largest donor.
The draft order will allow for the provision of the core funding by the UK. This replenishment will play a crucial role in supporting regional efforts to meet the sustainable development goals. The SDF will focus on promoting economic development and supporting increased resilience, with a particular focus on environmental resilience.
Lincoln Jopp (Spelthorne) (Con)
Can the Minister tell us who the largest donor will be?
Chris Elmore
If the hon. Member will give me two moments, I will get the correct name for him, because the list is not in front of me. It is in fact Canada—I am grateful to the officials on my left.
I will go through each point in turn. The SDF will build resilience against environmental stresses and disasters. It will fund climate adaptation, disaster risk management, biodiversity preservation and sustainable energy. That will include 10 km of new or improved sea defences and drainages, 6 MW of renewable energy and a reduction of 30,000 tonnes of greenhouse gas emissions annually. The SDF will ensure that Caribbean infrastructure, agriculture and small businesses are supported to thrive. It will do so by training over 10,000 agricultural workers, improving 2,000 hectares of land, providing $75 million in credit to over 1,000 small businesses, half of which will be women-owned businesses, and building or upgrading 200 km of roads.
The SDF will support poverty reduction efforts in the region and improve living conditions by targeting the most vulnerable communities. That will include improving water and sanitation for over 30,000 households, building or upgrading 1,700 classrooms, training over 18,000 teachers and improving learning conditions for 350,000 students. It will also improve financial systems and practices so that individuals, Governments and organisations can better manage risks and respond to uncertainty. Twenty Caribbean Ministries, Departments and agencies will benefit from strengthened systems and services. The SDF will strengthen and modernise institutions so that they can respond effectively to challenges. It will support digital transformation in 11 Caribbean Ministries and agencies to help them operate more efficiently.
The SDF is an essential lifeline to the region’s most vulnerable people who have faced multiple crises over the last few years, including climate-related shocks to which the region is exceptionally vulnerable. Supporting the SDF will help us to achieve our objective of a bigger, better and fairer global financial system that delivers for everyone and is fit for the future.
To conclude, the Caribbean Development Bank special development fund is instrumental in achieving UK objectives in the Caribbean region. The financial contributions covered by the draft order will deliver UK international development and foreign policy objectives in some of the world’s most climate-vulnerable countries. I commend the order to the Committee.
Wendy Morton (Aldridge-Brownhills) (Con)
It is a pleasure to serve under your chairship, Ms Jardine. I thank the Minister for setting out the draft order.
The Caribbean faces profound and overlapping challenges, and we recognise that the Caribbean Development Bank contributes to supporting resilience, stability and development across the region. Nevertheless, given the pressures on the aid budget, it is right that Parliament seeks clarity on priorities, governance and outcomes. The special development fund is the bank’s primary concessional window, and the 11th replenishment comes at a moment of acute vulnerability for many Caribbean states. Hurricanes and extreme weather events are increasing in frequency and severity, placing extraordinary strain on infrastructure, public finances and social systems. Disaster preparedness, climate resilience and rapid recovery must therefore be central to how these funds are deployed.
My first question to the Minister is about priorities. What strategic objectives has the UK pressed for in this replenishment, and did the bank agree to them? How will funding balance long-term development with urgent disaster response, particularly for the small island developing states repeatedly hit by hurricanes? Secondly, what influence does the UK retain as a contributor? Can the Minister set out how the UK uses its voice within the Caribbean Development Bank to shape investment decisions, policy standards and value for money? How closely is that aligned with wider UK development and foreign policy objectives in the Caribbean?
Briefly, I will turn to measurement and accountability. What criteria will be used to assess whether this replenishment is delivering results? How will those outcomes be tracked and what reporting will be provided to Parliament? Will the Government commit to regular updates on the impact?
There is also a growing geopolitical context that cannot be ignored. China has increased its footprint across the Caribbean through finance and infrastructure, so how is the development bank ensuring that its lending offers a transparent, compelling and high standards alternative? What role is the UK playing in reinforcing those safeguards?
On preparedness and recovery, can the Minister update the Committee briefly on how the bank is working with the private sector, including the world-class insurance industry in the City of London, to improve risk insurance, catastrophe financing and faster recovery after hurricanes?
His Majesty’s official Opposition recognise the importance of the Caribbean Development Bank, and we will not oppose the statutory instrument this evening, but, of course, scrutiny matters. Clear priorities, measurable outcomes and transparent reporting will be essential if the funding is to deliver real resilience for Caribbean nations and value for money for the UK taxpayer. I look forward to hearing the Minister’s response.
Chris Elmore
I thank the official Opposition for their support and I want to come back to as many of the shadow Minister’s points as I can. As I canter through the questions, the usual caveat applies and I will write to the right hon. Lady if I miss something or if I am unable to give a substantive answer.
On the first point, about climate and disaster risk, at least 35% of early funding in SDF11 will be allocated to climate projects, rising to 40%. It is an early part of the structure. On priorities, the pillars of climate resilience, production, poverty, living conditions, financial systems and digital transformation form part of our wider work on overseas development aid and the funding that goes with it.
On the results we expect and how we will to maintain and check them, we have five areas to cover. One is climate resilience, which is linked to 10 km of sea defences, 6 MW of renewables, and the training of 10,000 trained agricultural workers. That is the list of outcomes that I gave in my opening speech, but they are the set outcomes for how the funding can be used.
On governance and the UK’s role, in my speech I mentioned the provision of up to £21 million, which is part of our governance and scrutiny arrangements for the work of the new chief executive of the development bank. It also ensures that we have meaningful deliverables and play our part in the governance structure of the bank.
On insurance work, the wider work around risk management and the work that the bank and UK Government do in this space, the best example I can give the right hon. Lady is what happened recently in the Caribbean, that is, Jamaica and Hurricane Melissa. HMG were at the forefront of accessing additional insurance relief funding in response to Melissa. That work is ongoing, but, crucially, the UK Government are at the very forefront of being able to secure that funding for the Caribbean.
I completely agree with the right hon. Lady about the vulnerabilities of SIDS and, obviously, all Caribbean nations are SIDS. I saw for myself at the beginning of December the sheer scale of a climate shock like Melissa in Jamaica—roads that were there are there no longer—and that forms part of the initial challenges.
I am grateful for the right hon. Lady’s comments and the official Opposition’s support. The SD fund is a vital source of finance for some of the most vulnerable countries and people in the world. Supporting the fund is essential to strengthen development and resilience across the region. I hope that the Committee will support the order.
Question put and agreed to.