TOKYO, Japan. - In celebration of the 40th anniversary of Japan’s membership in the Inter-American Development Bank (IDB), Japanese Deputy Prime Minister and Minister of Finance Taro Aso and IDB President Luis Alberto Moreno, on the occasion of the President’s visit to the Japan-LAC (Latin America and the Caribbean) Business Forum in Tokyo, agreed to expand the Japan-IDB partnership into a new and comprehensive one mobilizing full package of cooperation modalities.
President Moreno said, “Over the past 40 years, Japan has become a key partner for our region in areas such as economic cooperation, private sector development, environmental protection and natural disaster prevention. And today, more than ever, I believe that Latin America needs Japan, and Japan needs Latin America.” He added that, “Japan is today one of the biggest sources of FDI for our region, and remains the biggest source from Asia.”
Deputy Prime Minister and Minister of Finance Aso said "Japan is willing to support LAC region's sustainable growth, particularly by utilizing our human and financial resources, experiences and innovative technologies." He also said "I believe the new comprehensive partnership with IDB Group to address quality infrastructure and climate change will generate fruitful results and lasting friendship between Japan and LAC."
The expanded partnership includes:
First, the Japan Bank for International Cooperation (JBIC) and the IDB signed a Memorandum of Understanding to strengthen their co-financing arrangement to address climate change and environment issues and promote quality infrastructure in the region. JBIC will utilize its GREEN loan for the first time in a co-financing with IDB. Financing agreement for a project in Ecuador is expected to be signed soon, and another project has been identified in Bolivia.
Second, JBIC, IDB and the Inter-American Investment Corporation (IIC), a private sector arm of the IDB Group, have started to have consultation meetings to further strengthen their partnership in the area of co-finance including equity investments with the view to enhancing quality infrastructure projects through Public-Private Partnerships (PPP) and other private sector initiatives exerting a favorable impact on the preservation of global environment and expansion of business activities between LAC and Japan. Both parties expressed their hope that the consultation meetings would lead to fostering a more solid partnership in the area of co-finance, combining both loans and equity investments, thereby further enlarging the variety of schemes available for the three entities to collaborate in the LAC region.
Third, both parties agreed to start practical discussion to create a new technical cooperation facility dedicated to assisting public and private entities in LAC in the identification, development, preparation and implementation of sustainable PPP infrastructure projects. Both parties expressed their hope to come up with a mutually agreeable scheme of PPP facility toward the Annual Meeting in Paraguay.
The facility is a response to the partners’ shared focus on quality infrastructure, which they consider the basis for sustainable economic development in the region. It is also a complementary response to a strong regional demand for financial resources and the human capital necessary to prepare and implement investments in that sector for which Japan established a new technical assistance trust fund (Japan Quality Infrastructure Initiative, JQI) in May.
Both parties appreciated that these new initiatives, in addition to the Co-financing for Renewable energy and Energy efficiency (CORE) Program, a $3 billion co-financing framework between Japan International Cooperation Agency (JICA) and IDB to support renewable energy, energy efficiency and quality infrastructure projects in the region, would make a comprehensive package of cooperation modalities for addressing critical development challenges such as climate change and quality infrastructure. Under the CORE Program, Japan and IDB expressed their intention to jointly support project in Jamaica that focuses on energy efficiency. In addition, IDB is considering to co-finance with JICA a project in Bolivia to modernize its energy sector.
The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.
- Isabel Alvarez-Rodriguez