September 26, 2019
Investments aim to mobilize up to $10 billion with the private sector
WASHINGTON – At the 60th anniversary celebration of the Inter-American Development Bank (IDB), Luis Alberto Moreno, IDB President and Chairman of the Board of IDB Invest, and David Bohigian, Acting President and CEO of the Overseas Private Investment Corporation (OPIC), signed a memorandum of understanding (MOU) pledging to invest a combined $3 billion in development projects in Latin America and the Caribbean over the next five years, with the option of increasing the investment to $5 billion. IDB Invest and OPIC aim to match this investment by catalyzing additional capital from the private sector, for a total ranging between $6 billion and $10 billion.
“To achieve shared development goals in Latin America and the Caribbean, IDB Invest seeks solid partners like OPIC to jointly attract private investors, multiply our impact, and ultimately make our mark on the region’s development,” remarked James P. Scriven, CEO, IDB Invest.
"Meeting the vast development needs of Latin America and the Caribbean will require innovative thinking and strategies,” said Bohigian. “By leveraging our toolkit and the regional expertise of IDB Invest, we can scale our impact and promote a private sector-led model that promises greater prosperity and stability throughout this critical region.”
The MOU is a key element of joint efforts by these organizations to catalyze resources for the Latin America and Caribbean region. To achieve this goal, OPIC and IDB Invest will seek to leverage their collective resources to conduct business development, due diligence, and ongoing monitoring of jointly supported projects.
Within this collaboration, IDB Invest and OPIC will focus on projects denominated in U.S. dollars or local currency in the infrastructure sector, namely in the areas of transport, energy, water and sanitation, and social infrastructure, which includes health and education. They will also prioritize investment in businesses and funds owned by, led by, or providing a product or service that intentionally empowers women. This gender focus builds upon the Fund Mujer initiative launched by OPIC and IDB Invest in 2018.
Both institutions will explore providing clients a variety of solutions beyond senior debt, including mezzanine financing and equity. Their collaboration will advance a robust alternative to state-led investments that undermine the long-term prosperity, stability, and security of countries in Latin America and the Caribbean.
This announcement accompanies a milestone in United States development finance as OPIC prepares to transform into the U.S. International Development Finance Corporation (DFC). Equipped with a more than doubled investment cap of $60 billion and new tools, DFC will have more resources to better mobilize private capital to the developing world and expanded flexibility to collaborate with like-minded counterparts like IDB Invest.
About IDB Invest
IDB Invest, a member of the Inter-American Development Bank (IDB) Group, is a multilateral development bank committed to the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects so they can achieve financial results and maximize the region’s economic, social, and environmental development. With a portfolio of $12.4 billion in assets under administration and 342 clients in 24 countries, IDB Invest provides innovative financial solutions and advisory services in response to its clients’ needs in a variety of sectors.
The Overseas Private Investment Corporation (OPIC) is a self-sustaining U.S. Government agency that helps American businesses invest in emerging markets. Established in 1971, OPIC provides businesses with the tools to manage the risks associated with foreign direct investment, fosters economic development in emerging market countries, and advances U.S. foreign policy and national security priorities. OPIC helps American businesses gain footholds in new markets, catalyzes new revenues and contributes to jobs and growth opportunities both at home and abroad. OPIC fulfills its mission by providing businesses with financing, political risk insurance, advocacy and by partnering with private equity fund managers.
OPIC services are available to new and expanding businesses planning to invest in more than 160 countries worldwide. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers. All OPIC projects must adhere to best international practices and cannot cause job loss in the United States.