Member countries pledge $317 million to the Multilateral Investment Fund
ASUNCION, Paraguay - Japan and a group of Latin American and Caribbean countries will lead a $317 million capital replenishment for the Multilateral Investment Fund (MIF), the innovation lab of the IDB Group.
An agreement to beef up the MIF was announced today at the closing of the annual meeting of the Boards of Governors of the Inter-American Development Bank (IDB) and the Inter-American Investment Corporation (IIC), which was held in Asunción this weekend.
The new round of contributions was led by a group of Latin American and Caribbean countries that will provide $166.8 million to the MIF. Japan will donate $85 million, with the balance being provided by Spain, Canada, China, and five other European countries. Israel is also becoming a donor to the MIF.
“This decision represents a vote of confidence in the IDB Group,” said IDB President Luis Alberto Moreno. “The replenishment of the MIF underscores a commitment to international cooperation to fight poverty through private sector development.”
Historically, the United States had been the biggest donor to the MIF, a brainchild of then U.S. president George H.W. Bush. The fund was established in the early 1990s to boost entrepreneurship and employment in Latin America and the Caribbean at a time when many countries in the region were carrying out privatization and trade liberalization reforms.
Paraguayan Finance Minister Santiago Peña, who on Saturday was elected chairperson of the Boards of Governors of the IDB and the IIC, applauded the generosity of the donors, whose contributions will ensure the continuity of the MIF’s operations until 2023.
“I’d like to highlight the historic effort of our Latin American and Caribbean member countries, whose contributions to the MIF rose from 8% in the previous replenishment to 55% in this round,” Moreno said. “This is part of a growing global trend of developing countries investing resources to strengthen their own regional institutions.”
Over the years, the MIF has funneled more than $2 billion to finance nearly 2,000 projects, becoming the region’s largest technical assistance donor. Its financing supports small projects backed by businesses, foundations and non-governmental organizations.
MIF projects, which stand out for taking unusual risks and testing new ideas to promote development, are aimed at generating more income opportunities for and raising the living standards of low-income people and communities.
Among other innovations, the MIF was a pioneer in supporting the development of microfinance. Currently it focuses on projects involving climate-smart agriculture, inclusive cities and the knowledge economy.
The MIF is administered by the IDB, the leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IIC manages the IDB Group’s private sector operations.
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.
- Paul Constance