Summary
This paper explores how Latin American countries can mobilize private capital to expand transport systems that support economic development while accelerating the transition toward low-carbon mobility. Focusing on Brazil and Colombia, it examines why smaller municipalities struggle to finance electric bus fleets and charging infrastructure despite the climate and local pollution benefits of replacing diesel fleets. The paper proposes a “Green Guarantee” mechanism through which carbon credit revenues help subsidize credit and political risk guarantees, making private investment in e-buses and charging infrastructure more viable. By combining carbon markets, guarantee instruments, technical assistance, and pooled financing structures, the model offers a pathway for the IDB and partners to scale sustainable transport finance across the region.
Alvin Lin
Linus Beer
Dylan Russell
Isabel Jurado
Itsuki Nishizawa
2025 Policy Analysis Exercise