PARIS - The Inter-American Development Bank (IDB) and the Council of Europe Development Bank (CEB) signed today in Paris, in the margins of the meeting of the Heads of Multilateral Development Banks (MDBs) Group, a landmark €500 million Exposure Exchange Agreement (EEA). This is the first transaction between the two institutions, the first EEA ever executed in a currency other than the U.S. dollar, and the first of its kind for the CEB. The agreement allows both institutions to further optimize the use of their capital resources, strengthening their ability to scale development financing.
An Exposure Exchange Agreement is a financial instrument that allows MDBs to diversify risks by exchanging their exposures across regions. EEAs reduce risk concentration and free up capital, increasing lending capacity to better finance their member countries. They offer an efficient solution to regional MDBs, which often have limited opportunities for portfolio diversification.
The exchange will be “synthetic,” as it does not entail the actual transfer of loans from either MDB’s balance sheet and does not change the relationship between the original lender and the borrower.
“This agreement is a milestone: it’s the first-ever exposure exchange in euros and our first with the CEB,” said IDB President Ilan Goldfajn. “By sharing risk, we strengthen both institutions’ balance sheets and expand our ability to deliver impact. For the IDB, this means $2 billion more over a decade in critical additional capacity to support Latin America and the Caribbean.”
“Exposure Exchange Agreements are a powerful demonstration of how working together makes us more efficient and resilient,” said CEB Governor Carlo Monticelli. This is a first for the CEB, and this partnership with the IDB will strengthen the CEB’s ability to support its borrowers and invest in projects that foster Europe’s social cohesion and sustainable development.”
This pioneering transaction reflects a shared commitment across MDBs to use innovative financial tools like EEAs to manage risks more effectively, deploy resources more efficiently and expand impact across regions.
About the IDB
The Inter-American Development Bank (IDB) is devoted to improving lives across Latin America and the Caribbean. Founded in 1959, the IDB works with the region’s public sector to design and enable impactful, innovative solutions for sustainable and inclusive development. Leveraging financing, technical expertise and knowledge, it promotes growth and well-being in 26 countries.
About the CEB
The Council of Europe Development Bank (CEB) is a multilateral development bank with an exclusively social mandate from its 43 member countries. The CEB finances investment and provides technical assistance in social sectors such as education, health and affordable housing, while focusing on the needs of vulnerable people, as well as on the social dimensions of climate change and the environment. Borrowers include governments, local and regional authorities, public and private banks, non-profit organisations and others. The CEB, which has a triple-A credit rating, funds itself through international capital markets. In addition, the CEB receives funds from donors to complement its activities.
Press contact: Silvia Zucchini, CEB Head of Communications, +33 7 87 70 21 93, [email protected]
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