public sector financing


Public Sector Financing

The Inter-American Development Bank (IDB) currently has three lending categories based on the development purpose, eligibility, and disbursement requirements of the loan, as well as the criteria for determining the size of the loan amounts and the financial terms. Each lending category includes different types of lending instruments and approaches.

Lending Categories

Investment lending to IDB borrowing member countries finance goods, works, and services to promote social and economic development. This category includes specific instruments to support IDB borrowing member countries in the event of a natural disaster.

Policy-based lending provides the Bank’s borrowing member countries with flexible, liquid (fungible) funding to support policy reforms and/or institutional changes in a particular sector or subsector. The country and the IDB discuss and agree upon those reforms or changes.

Special development lending supports borrowing countries during a macroeconomic crisis and mitigate the effects on the countries’ economic and social progress.

Guarantees Instruments for Sovereign Guaranteed Operations

In addition to the three lending categories the IDB can guarantee loans made by private financial sources in public sector projects. Guarantees seek to improve financing conditions for projects in Latin America and the Caribbean and helps promote investment in borrowing countries. Click here to learn more.