The Inter-American Investment Corporation was established in 1986 to promote private investment within the Inter-American Development Bank. By 2016 it had significantly expanded the size and efficiency of its operations and became a new organization called IDB Invest.
By re-introducing IDB Invest to the world in 2017, a new dynamism and new resources were established in the work with the private sector in Latin America and the Caribbean. IDB Invest’s goal is to be the best ally for the region’s best companies.
In recent years, Latin America and the Caribbean have been experiencing steady growth due to the benefits of macroeconomic stability and economic globalization in many countries. In this context, IDB Invest is expected to play an increasingly important role in investments, energy, infrastructure, and corporate productivity.
Against this backdrop, in March 2024 during the Annual Meeting, the Inter-American Development Bank Board of Governors approved a $3.5 billion capital increase for IDB Invest.
The new IDB Institutional Strategy adopted at the Annual Meeting 2024 prioritizes support for the development of a more dynamic and competitive business environment for the IDB, IDB Invest, and IDB Lab as a whole and increased private sector-led economic growth in the region. The capital increase, which represents an increase of approximately 43 percent since the last, will expand IDB Invest resources to their largest level in 25 years. In line with its current share (3.67%), Japan will now provide JPY19.3 billion in support to IDB Invest.
In conjunction with this capital increase, the Board of Governors of IDB Invest has adopted a new business model, IDBInvest+, under which IDB Invest aims to further attract private investment in the LAC region by shifting from the traditional “co-financing type” of support to an “originate-to-share” business model of support that enables it to assume more risk in order to meet the vast development needs in the LAC region.
This approach will create a virtuous cycle of capital release and reallocation, further facilitating private investor participation and significantly improving capital efficiency. Under this new business model, IDB Invest will significantly improve its ability to engage in equity investments and riskier lending operations and is now expected to increase the number of cases of cooperation where Japanese companies and financial institutions may be involved.
These are some examples of a recent collaboration between IDB Invest and Japanese private companies.
Signed a co-financing framework with IDB Invest (December 2022)
IDB and JBIC (December 2017)
The agreement adopted by the IDB Invest Board of Governors states that the combination of the new business model and additional capital is expected to have the following development impacts, specifically, it highlights: “The new business model is expected to bring US$102 billion in long-term financing to the region over the next 10 years, more than twice what is possible with the current business model. Of this, US$59 billion (58%) will be achieved through private capital mobilization resulting from the catalytic effects of IDB Invest".
More importantly, it is expected that IDB Invest will be able to support 2.7 million MSMEs, +10 million jobs, install +1.6GW of renewable power, avoid emitting +4.3 million tons of CO2, and support +340,000 women entrepreneurs under the new business model.
BID for the Americas is the IDB’s program designed to foster business opportunities and strengthen economic ties between 26 countries in Latin America and the Caribbean and key partners from Europe, North America, and Asia.
(February 18, 2025)
(October 30, 2024)