Member countries of the Inter-American Development Bank (IDB) have approved a resolution authorizing a $70 billion increase in the Bank´s ordinary capital.

The vote by the IDB’s Board of Governors, which concluded Jan. 31, was carried out electronically over several months to give countries time to secure legislative approvals for the increase. The Board of Governors is the Bank’s highest governing authority and is composed of top economic officials from the IDB’s 48 member countries.

The resolution was posted today on the IDB´s website.

“Latin America and the Caribbean has made great strides in recent years but faces great challenges in meeting its citizens’ expectations of reaching higher living standards,” said IDB President Luis Alberto Moreno. “Thanks to this capital increase we will be in a better position to help our region in its efforts to develop more responsive governments, more inclusive economies, more livable cities and more sustainable environments.”

The General Capital Increase (GCI) will become effective once countries deposit instruments of subscription for a total of three-fourths of the ordinary capital shares created under the GCI. Once it is fully implemented, the GCI will raise the IDB’s capital to $171 billion, making it the largest regional development lender.

The paid-in portion of the capital increase will amount to $1.7 billion, with payments made over a five-year period. The balance will augment the callable capital which is a resource, if needed, for the IDB to satisfy its financial obligations. The IDB has never required payments from its member countries on its callable capital and has maintained the highest credit ratings throughout its 54-year history.

With these additional resources, the IDB will be in a position to approve about $12 billion per year on average in financing over the 2012-2021. During the 2002-2011 period it approved an average $8 billion a year (excluding emergency lending). The IDB also provides around $700 million in grants per year.

Under the agreements underpinning the GCI, the IDB will strive to provide more financing for small and vulnerable nations among its 26 borrowing members in Latin America and the Caribbean, focusing on priorities such as poverty reduction, infrastructure, integration, sustainable energy and climate change, among others. The capital increase will also make more resources available for private sector lending. A series of reforms in recent years have made the IDB more accountable and results-oriented.

The IDB’s most recent capital increase was implemented over a six-year period ending in 1999.