IDB Board approves roadmap for reform, more funding for Latin America, Caribbean Region

Mar 30, 2022 News

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Kaieteur News – The Boards of Governors of the Inter-American Development Bank (IDB) recently approved a roadmap for a series of institutional reforms for the financial institution as well as mandated a proposal for capital increase to IDB Invest, the Bank’s private-sector arm.
The Governors’ actions essentially modernise the IDB, IDB Invest and IDB Lab, which is the organisation’s innovation laboratory, thereby ushering in a new, 21st-century business model that will help countries across Latin America and the Caribbean more effectively address challenges. These include poverty and inequality, climate change and the need for digitalisation.
Executives at the institution said the proposed reforms will empower the Bank to accelerate inclusive and sustainable growth by strengthening the synergies between the public and private sectors, ensuring equal opportunities for women in areas of education, business and justice, and doing more to help countries reach net-zero-emissions targets.
“Our record year, 2021 proved how the IDB can optimise its balance sheet and mobilise resources, but the new IDB can do even better. This is a historic moment for the IDB and IDB Invest. The Boards’ actions mean we are gaining the muscle, flexibility and tools needed to support the urgent needs of Latin America and the Caribbean in the 21st century,” said IDB President Mauricio Claver-Carone at the Bank’s annual meeting.
“The pandemic hit our most vulnerable citizens hard. Now the region faces rising inflation, higher global interest rates, and shifting geo-economic and geopolitical concerns. We rose to the occasion in 2020 and 2021, but we can now do even more by leveraging our strengths. Thanks to the Governors’ actions, we are now empowered to better help the region by mobilising more private-sector resources and doing more in critical areas such as climate change and gender equality,” he said.
The new business model envisioned for IDB Invest, or IDB Invest 2.0, will be developed over the next six months and submitted to the Board for approval this fall. The approval to advance with the new vision signifies confidence in IDB Invest’s ability to develop an even more impactful approach to development. Furthermore, the new model will allow it to scale up work with investors and companies throughout the region.
Additionally, the IDB Invest’s innovative, new approach is expected to focus on originating more impactful projects, de-risking private-sector investment, and using new financial and technical tools to help crowd-in investment. The new business model essentially goes hand-in-hand with the mandate for a capital increase proposal for IDB Invest, the details of which will be presented to the Boards of Executive Directors later this year.
During the 2022 annual meeting that was held virtually, Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh, lauded the commitment of the IDB Group to the continued support to the Caribbean sub-region. The Minister was speaking on behalf of the Bahamas, Barbados, Guyana, Jamaica and Trinidad and Tobago, the smallest member countries of the IDB Group.
“The Bank’s instruments to support our countries in achieving our development agendas are crucial and must remain agile to respond to mounting needs in this volatile environment. Therefore, the Caribbean welcomes the proposal to adjust the instruments on offer,” expressed the Senior Minister.
“We particularly wish to highlight the important role of PBLs (Performance-based loans) in supporting integral reforms at this critical juncture and support the call for PBL caps to be made more flexible. We also welcome the proposal to exclude green PBLs from counting against the PBL cap,” Dr. Singh said, adding that guarantees will be key in mobilising private resources to contribute to confronting emerging development challenges and delivering on the 2030 agenda’.
Dr. Singh concluded by encouraging the IDB Group’s Management to fulfill their pledge to develop a sub-regional strategy for the Caribbean with emphasis on health, education, infrastructure, private sector development, the digital economy, climate change, the blue economy, and the orange economy.
He also encouraged the Bank to move with alacrity in delivering support at the scale needed, on both the public and private sector sides of the Group’s operations, to facilitate a sustainable recovery in the Caribbean and to help the Sub-Region embark on a path towards lasting economic growth and prosperity.
The Minister then reiterated the strong appreciation of the Caribbean for the support provided by the IDB to the sub-region over the years as well as the importance of the Group to the development of Latin America and the Caribbean, in particular. He added that the Bank remains the premier strategic partner of choice in member countries.

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