Latin America, Caribbean get US$19.5 b in IDB funding
WASHINGTON, DC, United States (CMC) — The Inter-American Development Bank (IDB) yesterday said that together with its private sector arm, IDB Invest, they expect to close this year with US$19.5 billion in new financing for Latin America and the Caribbean (LAC).
They helped countries recover from the coronavirus (COVID-19) pandemic while ushering in an era of sustainable and inclusive growth.
The Washington-based financial institution said that the financing is the second-highest annual total in the history of the IDB and IDB Invest and helps countries invest in priorities ranging from COVID-19-era healthcare and digitalization to climate change action, supply chains and education.
The funding will also help reduce gender inequality, expand entrepreneurial ecosystems, and empower small and midsize companies, which account for over two-thirds of the region's jobs.
The combination of IDB loan approvals ($14 billion) and expected IDB Invest financial commitments ($5.5 billion) and private-sector mobilizations ($2.8 billion) totalled $22.3 billion.
The IDB said that the pandemic hardest hits Latin America and the Caribbean. It said home to about eight per cent of the world's population, the LAC accounts for almost a third of all COVID-19 deaths – over 1.5 million people. The region also faces high inequality and severe economic and social challenges.
"This year, we demonstrated how a 21st-century IDB can empower countries to overcome unimaginable challenges and pave the way to a new decade of prosperity.
"We did so by listening carefully to our clients and member countries and by leveraging our exceptional human capital to create innovative financing and private-sector partnerships that will accelerate the region's recovery," said IDB President Mauricio Claver-Carone.
"The pandemic created unprecedented challenges, but it also opened historic opportunities for Latin America and the Caribbean to grow, especially in areas including digitalization, nearshoring and supply chains – and we are proud to be there, focused on helping countries seize those opportunities," he added.
In total, the IDB approved 103 sovereign guaranteed projects in 2021 for a total of US$14 billion, while disbursements are expected to reach US$12.1 billion.
The bank said in the context of COVID-19, financing helped countries secure life-saving vaccines. It increased access to credit so that small and midsize companies, the main drivers of employment, could expand their businesses.
It said new projects and financing would accelerate digitalization so countries can improve public services, expand educational access, increase transparency and combat corruption. Funding will also help enhance digital-skills training to enrich the region's human capital.
Amid a historic reconfiguration of international trade, the IDB approved US$2.3 billion to strengthen regional supply chains, nearly doubling the average amount of the three years before the pandemic. "This will help countries take advantage of a tangible new opportunity, amplified by the pandemic and the global supply-chain crisis, to attract foreign direct investment and increase exports of goods and services."
The IDB said it also worked with 16 countries to identify critical export and supply-chain advantages.
In 2021, the IDB continued to make it easier for countries to accelerate pandemic recovery while simultaneously addressing critical, longstanding issues, such as climate change and gender inequality.
The IDB launched its Amazon Initiative and approved about US$4.5 billion in resources for climate-related operations, the highest amount ever. It also took a leading role among multilateral development banks at COP26, the annual United Nations conference on climate change, announcing a plan to fully align operations with the Paris Agreement and provide $24 billion for climate and green finance over the next four years.
Of all projects approved in 2021, the IDB said nearly 70 per cent included one or more components to tackle climate change, while 75 per cent addressed gender issues. Almost 40 per cent of approvals went to small and vulnerable countries.
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