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Box 10 • IDB Fund Supports Infrastructure Investment

In its first 15 months of operations the Infrastructure Project Preparation Fund (InfraFund), which finances the preparation and development of critical infrastructure in Latin America and the Caribbean, has directed more than $12 million in grants to 14 countries to support 23 projects that will eventually pave the way to billions of dollars in investments. These operations also leveraged $10.7 million in counterpart and other resources for the early phases of project preparation and development. In 2007 the Bank approved 18 InfraFund projects for a total of $8.7 million.

Launched with an initial IDB contribution of $20 million in September of 2006 and operating through a fast-track mechanism, InfraFund finances feasibility studies, technical analyses and other preparatory activities that are an essential prerequisite for strategic, sustainable infrastructure investments.

Of the approved financing operations, nine have supported energy projects ($3.7 million), seven transportation ($4.5 million), five water and sanitation ($2.9 million), and two multisectors ($1 million). These preparatory investments benefited projects in Argentina, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Guatemala, Honduras, Mexico, Panama, Paraguay, Suriname and Uruguay.

Some of the landmark InfraFund projects include: Santa Fe Wind, a new private development that will be Panama’s first wind power project; Portais da Cidade, an innovative public-private bus rapid transit system scheme for Porto Alegre, Brazil; a joint venture of Argentina and Uruguay for a liquefied natural gas plant, the first of its kind on the Atlantic coast of South America; rehabilitation of the Peligre hydroelectric power plant in Haiti, which supplies close to 25 percent of the country’s power; and the Rio de Janeiro-São Paulo highspeed train, a project that may have a total value of $9 billion.

Apart from private and national government clients, InfraFund is supporting infrastructure investments led by subnational governments, such as the Brazilian cities of Brasilia, Rio de Janeiro and Porto Alegre; and the city of Pasto and state of Cundinamarca in Colombia. Other projects of subnational entities supported by InfraFund include the power utility of the province of Entre Ríos, Argentina; the water utility companies of Monterrey, Mexico; and Costa Rica’s national power and telecommunications institution, ICE, which is also supported by the Bank’s first non-sovereign-guaranteed loan to a state-owned company.

In addition, InfraFund has granted eligibility for $4.8 million in grants to assist an additional six projects that are expected to obtain approval before the close of the first quarter of 2008. These projects include two in countries in which the fund has not previously invested (Jamaica and Peru); one in the telecommunications sector; and the first InfraFund project for a client of the Inter-American Investment Corporation, a member of the IDB Group that finances small- and medium-sized companies.