The Inter-American Development Bank (IDB) and its private-sector arm, IDB Invest, expect to close the year 2021 with $19.5 billion in new financing for Latin America and the Caribbean.
They helped countries recover from the pandemic and usher in an era of sustainable and inclusive growth.
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) totaled $22.3 billion.
Latin America and the Caribbean is the region hardest hit by the pandemic. Home to about 8% of the world’s population, it accounts for almost a third of all COVID-19 deaths – over 1.5 million people. The region also continues to face high inequality and serious 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 $14 billion, while disbursements are expected to reach $12.1 billion. In the context of COVID-19, financing helped countries secure life-saving vaccines and increased access to credit so that small and midsize companies, the main drivers of employment, can expand their businesses.
New projects and financing will accelerate digitalization so countries can improve public services, expand educational access, increase transparency, and combat corruption. Funding will also help improve digital-skills training to enrich the region’s human capital.
Amid a historic reconfiguration of international trade, the IDB approved $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 also worked with 16 countries to identify critical export and supply-chain advantages, including, for example, in Costa Rica’s semiconductor sector and the textile sector in Central American countries.
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.
Of all projects approved in 2021, nearly 70% included one or more components to tackle climate change, while 75% addressed gender issues. Almost 40% of approvals went to small and vulnerable countries.
IDB Invest, the IDB’s private-sector arm, provided a total of $8.3 billion in financing in 2021. This includes $5.5 billion in short- and long-term commitments, and a record-breaking $2.8 billion in mobilizations. IDB Invest has mobilized $1 for every dollar closed on its own account in long-term financing, a 50% increase over the previous year.
At COP26, IDB Invest announced the first blue bond in Latin America and the Caribbean, highlighting the IDB’s commitment to designing innovative financial solutions for climate action.
