IDB Completes Credit-Risk Insurance Deal with Private Sector to Enhance Lending Capacity

The Inter-American Development Bank (IDB) completed its second risk-transfer transaction with private insurance companies, leveraging credit insurance protection to diversify its portfolio and unlock capital for additional lending. 

This transaction provides $300 million in credit insurance coverage across two sovereign exposures on the IDB’s balance sheet. By releasing capital with a lending multiplier of up to four times, the deal expands the Bank’s ability to increase development financing, supporting critical projects and improving lives in Latin America and the Caribbean. The coverage is distributed among seven insurance companies in the United States and Europe, including four new counterparties participating in this initiative.  

As a pioneer in credit-substitution transactions and guarantees, the IDB continues to lead innovative collaborations with Multilateral Development Banks (MDBs), governments, and the private sector. This effort reinforces the IDB’s strategy to maximize lending capacity and aligns with the recommendations of the G20-sponsored MDB Capital Adequacy Framework Review.