The Inter-American Development Bank (IDB) and the Inter-American Investment Corporation, a member of the IDB Group, together with more than 20 development finance institutions (DFIs), have agreed on a set of enhanced principles on blended concessional finance aimed at increasing private capital investment in vital development projects in emerging markets.
A report outlining the principles centers on how to best utilize limited public resources and funds from DFIs to increase private sector participation in order to achieve development goals.
In today’s market, long-term financing providing high risk tolerance and low costs is limited. To close investment gaps in infrastructure and address global commitments to tackle climate change, blended concessional finance is one tool used to increase private sector investment when fully commercial solutions are not available. Blended concessional financing combines donor funds with funds from commercial investors and DFIs to decrease risks associated with new technologies and first-mover operations, while increasing the potential for development impact.
The principles, first published in 2013, have been enhanced with more detailed guidelines developed by a working group representing DFIs that annually invest more than $35 billion a year in private sector solutions.
About the Inter-American Development Bank (IDB)
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.
About the Inter-American Investment Corporation (IIC)
The Inter-American Investment Corporation (IIC), a member of the Inter-American Development Bank Group (IDB Group), is a multilateral development bank committed to supporting the private sector in Latin America and the Caribbean. The IIC finances sustainable enterprises and projects to achieve financial results that maximize social and environmental development for the region. With a current portfolio of $11 billion under management and 350 clients in 21 countries, the IIC works across sectors to provide innovative financial solutions and advisory services that meet the evolving demands of its clients.