May 15, 2008
EU-LAC: EIB & IDB to increase co-financing in Latin America, with special emphasis on climate change mitigation
The European Investment Bank (EIB) and the Inter-American Development Bank (IDB) have agreed to strengthen their cooperation and cofinancing to support strategic development projects in Latin America and the Caribbean.
In their meeting in the context of the Lima Summit, IDB President Luis Alberto Moreno and EIB Vice-President Carlos da Silva Costa decided to further engage both Institutions in joining their financial efforts to scale-up projects and support European investments for development throughout the region.
In this regard, they reasserted their commitment to have IDB and EIB proceeding on a systematic and regular basis to the reviewing of their respective portfolios of operations in Latin America and the Caribbean, with the clear objective to identify more windows for cofinancing.
Through the deepening of their cooperation, the EIB and the IDB are willing to facilitate and contribute to the implementation of the priority areas of the V Summit of EU-LAC Heads of State and Government, in Lima.
The EIB and the IDB agreed on signing, jointly with the Central American Bank for Economic Integration and the Nicaraguan Government, a cofinancing plan for a total investment cost of more than US$118 millions on a program supporting the electricity sector in the country, with a strong emphasis on renewable energy. The program specifically aims at investments in transmission, transformation, and rehabilitation of hydroelectric generating plants. This project will have important positive socio-environmental impacts, benefiting to all users of electrical services within the country.
Also, EIB and IDB together with the Japan Bank for International Cooperation (JBIC) co-financed the Panama City and Bay Sanitation project, aimed at improving sanitary and environmental conditions in Panama City and bay area through wastewater treatment.
In addition, both institutions are in advanced discussions for the parallel financing of several other pipelined projects, with emphasis on two main types of operations. First, public sector lending for climate change related projects, particularly in smaller and lower income countries. Second, projects without sovereign guarantee and private sector projects where there is either an EU sponsor or which target renewable energy sources, energy efficiency and mass transport.
Under the current mandate, covering the period 2007-2013, the EIB is asked by the EU Council to lend up to EUR 2.8 billion in Latin America for financing operations supporting EU cooperation strategies and complementing other EU development and cooperation programs and instruments in the region. An additional EUR 3.0 billion are available for financing energy security and sustainability projects in investment grade countries, including those in Latin America, over the same period.
The Inter-American Development Bank Group approved $9.6 billion in financing for projects in Latin America and the Caribbean in 2007. The total includes $9 billion for 111 loans and 16 credit guarantees from the Bank; $470 million for the Inter-American Investment Corporation (IIC), the IDB affiliate specialized in small and medium-sized enterprises; and $135 million in financing from the IDB-administered Multilateral Investment Fund (MIF). The IDB also approved $167.8 million in grants for technical cooperation projects in 2007
European Investment Bank. The EIB is the European Union’s financing institution. Outside the EU, the Bank contributes to the European development and cooperation policy in some 120 countries in Asia and Latin America, Central and Eastern Europe, the Balkans, the Mediterranean region, Africa, the Caribbean and the Pacific. Since 1993 the EIB has carried out four successive EU lending mandates for Asia and Latin America.
Inter-American Development Bank. The Inter-American Development Bank, the oldest and largest regional development bank in the world, is the main source of multilateral financing for economic, social and institutional development in Latin America and the Caribbean. Its loans and grants help finance development projects and support strategies to reduce poverty, expand growth, increase trade and investment, promote regional integration, and foster private sector development and modernization of the State.