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Caribbean Development Bank

*The following content has been prepared by the Office of Liaison with the Caribbean Development Bank, located at our High Commission of Canada to Barbados.

The Caribbean Development Bank (CDB), established in 1969, is a regional, multilateral development bank headquartered in Bridgetown, Barbados. The Bank's membership consists of 28 member countries, including 19 regional borrowing member countries. Please visit our CDB Fact Sheet.

The regional members are the nine island states in the Organisation of Eastern Caribbean States and the Bahamas, Barbados, Belize, Colombia, Cayman Islands, Guyana, Haiti (a member since 2007), Jamaica, Mexico, Trinidad and Tobago, Turks and Caicos Islands, and Venezuela. The non-regional members are Canada, China, Germany, Italy and the United Kingdom. However, the Bank is interested in expanding its non-borrowing membership and is currently in discussion about possible membership with at least four additional countries.

Canada is one of the CDB's founding members and is classified as a non-regional, non-borrowing member of the Bank. Canada has always been a major contributor to the CDB's resources and makes its contributions primarily through the Canadian International Development Agency (CIDA). Canada holds 9.56 percent of the Bank's total shares.

The CDB has set itself a number of strategic objectives, and works to achieve them by means of a set of well-defined corporate priorities. These priorities focus on the social and economic development of the Bank's borrowing member countries, in accordance with its overall goal of reducing poverty in those nations.

The CDB's corporate priorities include the following:

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Country Strategies

Unlike other IFIs, the CDB does not develop individual country strategies for its borrowing member countries. Instead, the Bank prepares an overall strategic plan, which guides its development activities over a period of five years. The current strategic plan (2005-2009) has a number of themes and objectives, which are to:

During the current plan, the CDB is focusing on the themes of environmental sustainability and disaster risk management and reduction. Overarching these is the theme of poverty reduction, which applies to all the Bank's member states.

Project Cycle

There are six stages in the CDB project cycle. These are:

Procurement Process

The executing agency of the borrowing country is responsible for implementing a project. In this capacity it handles the procurement of goods and services, and the award and administration of contracts related to the project. The CDB's role in the procurement process is to ensure that the proceeds of a loan are used only for its designated purposes, and that due attention is paid to economy and efficiency.

Procurement begins with projects being advertised on the Bank's website, in United Nations Development Business (UNDB), in newspapers local to the project site and in regional newspapers. Advertisements are also sent to other channels of communication, such as the Canadian High Commission, embassies and diplomatic missions in the region.

After a project has been advertised, the procurement process moves through the following stages:

Selection and engagement of consultants involves a slightly more complex process that has these stages:

The evaluation of the proposals has several phases. The technical proposals are evaluated first. Then the financial proposal of the firm that ranked highest in the technical evaluation is opened and the firm is invited to negotiate. The firm ranked second highest is also placed on notice, in case negotiations with the highest-ranked firm fall through. The other firms are notified that their proposals were not successful.

The CDB is notified when negotiations are successfully concluded. The borrower then submits a draft contract to the Bank and the CDB is asked for a "no objection" so the contract can become effective.

Project and Procurement Information

The CDB publicizes information on projects it has approved, but not on projects it intends to fund or that it is considering for funding. Access to opportunities in the pre-approval pipeline therefore remains restricted. However, Canada's Office of Liaison with International Financial Institutions (OLIFI) in Bridgetown actively pursues updates of this pipeline information and shares any information obtained with Private Sector Liaison Offices in Canada and with other regional posts so that it will be more easily accessible to Canadian companies.

The CDB uses several procurement methods for approved projects. Recipients of CDB financing are usually required to obtain goods, works and services through International Competitive Bidding (ICB), which is open to eligible suppliers and contractors. Other procurement methods used include:

Where projects include components that will be procured using ICB, a General Procurement Notice (GPN) is issued after project approval. For contracts concerning goods and works, Specific Procurement Notices (SPNs) are advertised in UNDB and in the Procurement section of the CDB's website.

Registering on the Bank's website also entitles companies or individual consultants to receive project information directly from the CDB. These companies, and companies that have not registered, can also use the Bank's website to access the following information:

Suppliers of Goods, Works and Non-Consulting Services

Recipients of CDB financing are normally required to obtain goods, works and non-consulting services through ICB. The rules for bidding and advertising, for bonds and guarantees, and for the conditions of contract are identical to those used by the other major MDBs.

Goods procured using CDB financing must have both their source and origin in a member country. "Source" refers to the country from which an item is shipped, while "origin" refers to the country in which an item is grown, mined or produced. An item is considered to originate in a particular country if 50 percent of its value was added in that country.

Recipients of CDB financing are allowed a margin of preference for goods they are sourcing. For goods manufactured in the Commonwealth Caribbean (the English-speaking islands of the region and the mainland nations of Belize and Guyana) the maximum margin of preference is 15 percent, and for goods in other regional member countries it is 7.5 percent.

Contracts for goods and works are awarded according to the lowest evaluated bid.

Consultants and Consulting Services

Advertising of consultancy contracts is required in all instances, except where the fees and expenses are expected to be less than US$100,000 and where there is no expectation of a subsequent phase of work.

In evaluating prospective consultants, the CDB requires that recipients of financing pay particular attention to technical competence (30 percent), qualifications and experience (30 percent), local and regional experience (20 percent), financial capability (10 percent) and current commitments (10 percent).

When evaluating proposals, the CDB does not require that the lowest-cost proposal be selected, as the Bank recognizes that the trade-off between price and quality can be very difficult to assess. In consequence, different criteria are used for evaluating projects in which quality is a primary consideration, and those in which price can be the deciding factor. Even where price is decisive, however, measures must be put in place to ensure that quality is not compromised.

Trust Funds

The CDB currently administers a number of trust funds. These include two funds financed by Canada, one by Venezuela and one by the People's Republic of China. Canada's contribution goes towards the Basic Needs Trust Fund and the Canadian Technical Cooperation Fund.

Basic Needs Trust Fund

The Basic Needs Trust Fund (BNTF) provides for direct delivery of basic public services to poor communities. The BNTF has, since its establishment, developed special procedures and mechanisms to improve the targeting of needy communities, and to ensure the speedy implementation of sub-projects.

The expected results of the BNTF's programs are to:

Canadian Technical Cooperation Fund

The Canadian Technical Cooperation Fund (CTCF) provides financial and technical assistance for the CDB's activities, which include:

This funding is tied, so procurement is limited to Canadian citizens, landed immigrants resident in Canada and Canadian firms, corporate bodies and NGOs. The maximum value of any contract to be awarded using CTCF funding is US$100,000. As of 31 March 2008, the remaining available balance of the fund was US$681,892. With the imminent untying of development funds, it is not expected that the CTCF will be replenished.

Business Approach

Doing business with the CDB is similar to working with other multilateral development banks. The primary challenge for Canadian companies is the need to function in a different culture, and the comparatively slower pace of business in the Caribbean can be unsettling to Canadian companies new to the local market. This can be aggravated by the fact that most of the executing agencies that manage CDB-funded projects are government agencies, and these often have to work through long, bureaucratic processes before they can take action on a project.

Local Competition

The U.S. is not a member of the CDB and is not eligible to bid on CDB-funded projects. This eliminates competition from American firms, but this is offset by the fact that local firms, particularly from Trinidad and Barbados, are becoming increasingly successful at pursuing and winning CBD-funded contracts.

As a result, some Canadian businesses have decided to partner with local companies and/or to open offices in the region. This appears to have worked but in general, Canadian firms need to be more aggressive in establishing successful partnerships. The need for increased visibility in the local market is made more urgent by the impending loss of the tied trust fund at the CDB, which could have an adverse impact on Canadian involvement in CDB-funded projects.

Alternate funding mechanisms

Some Caribbean members of the CDB have been reluctant to use CDB funds, particularly when commercial bank funding has been readily available. This tendency can lead to looser procurement guidelines, and could also lead toward more regional procurement. In addition, some governments have chosen to access funds through other mechanisms, such as Chinese and Kuwaiti funds; these sources of financing are tied and thus limit Canadian access. The current global financial crisis may slow or even reverse this trend, however, since more governments are expected to turn to development banks as commercial loans become more difficult to secure.

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