IDB doubles lending to private sector

Following an external review of the IDB’s private sector lending activities, the Bank’s Board of Governors voted late last year to double the ceiling on loans and guarantees by the Private Sector Department from 5 percent to 10 percent of its total lending portfolio. The new ceiling will allow the Bank to support Latin America’s growing demand for private sector investments in crucial areas such as energy, water and transportation infrastructure.

A study on private sector operations commissioned by IDB President Enrique V. Iglesias concluded that a higher level of direct IDB lending to the private sector in Latin America and the Caribbean “will strengthen the environment for private investment in the region and mobilize significant resource flows to address the region’s infrastructure deficit.”

The Bank’s Private Sector Department began operations in 1995 under a mandate from the Board of Governors in conjunction with the Bank’s eighth capital increase. Since then the department has approved more than $2.4 billion in loans and guarantees for 51 infrastructure projects. It has also mobilized an additional $3.1 billion in financing from private lenders through syndicated loans. On average, for each dollar invested by the Bank in these operations, private investors committed five dollars in additional funds.

Norway joins Inter-American Investment Corporation

In January 2002 Norway became the 39th country to join the Inter-American Investment Corporation (IIC), a member of the IDB Group. The membership document was signed by Enrique V. Iglesias, president of the IDB, and His Excellency Knut Vollebaek, ambassador of Norway to the United States.

The IIC provides financing for small and medium-size private enterprises in the form of direct loans, direct equity investments, lines of credit to local financial intermediaries, and investments in domestic and regional venture capital funds.

See link at right for details.

Date posted: January 2002