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Corporates

Supporting Innovation and Productivity

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The pace of change has never seemed faster than today. People carry around more computing power in their smartphones than NASA had when it sent astronauts to the moon.

The Latin American and Caribbean region, like the rest of the world, is undergoing rapid change. Just in the last decade, digital technologies, higher education levels, better health care and more access to housing have accelerated the growth of the emerging middle class. The region is becoming ever-more urban, with greater demand for infrastructure and services, and business is becoming ever-more global. At the same time, low levels of productivity and innovation continue to make it difficult for many companies to compete.

At IDB Invest, we want to help our corporate clients navigate change and sharpen their competitive edge. We have been transforming our own business model to better address the needs of companies in different sectors, working with them to deploy the latest technologies, enhance productivity and create jobs. In 2016, we approved $372 million in projects in agribusiness, manufacturing, telecommunications and tourism—a 65 percent increase over the previous year.

Depending on the needs of each company and the nature of each project, our support might come in the form of a loan, in U.S. dollars or local currency; financial guarantees; value chain financing; or mezzanine debt or equity investment. We also bring to the table a range of advisory services and blended finance mechanisms to maximize development impact and sustainability.

Here’s a brief overview of the primary sectors where we provide corporate financing and services:

Agribusiness

Rich in land, fresh water and natural habitat, Latin America and the Caribbean is already the largest net food exporting region in the world, with enormous potential for additional growth and development. We provide financing and technical assistance to companies across the agribusiness value chain. Our efforts focus on three main areas: promoting inclusiveness by developing financing structures that will benefit smallholder farmers; enabling industrial companies and cooperatives to increase capacity, productivity and scale; and promoting sustainable practices to address the challenges of climate change.

Manufacturing

Worldwide, manufacturing accounts for about 16 percent of GDP and 14 percent of employment, but its importance to the economy varies widely from country to country. In the Latin America and Caribbean region, Argentina, Brazil and Mexico produce nearly 80 percent of total manufacturing output. After two years of weak regional performance, the manufacturing sector began showing signs of recovery in early 2017, according to the United Nations Industrial Development Organization. At IDB Invest, our focus is on providing manufacturers with long-term financing so they can increase innovation and boost productivity. In Ecuador, for example, the steel company Adelca more than doubled its installed production capacity thanks to a 10-year loan from the IDB Group.

Telecommunications, Media and Technology

Latin America and the Caribbean has seen explosive growth in this sector that is now so critical to every aspect of life, including health, education and finance. By mid-2017, there were some 459 million unique mobile subscribers in Latin America—a subscriber penetration rate of just over 70 percent, according to GMSA Intelligence. At IDB Invest, we want to invest strategically to address market gaps. In 2017, for example, we signed a six-year, $100 million financing package with Telecom Personal in Argentina, to expand its 4G mobile broadband network. We are also supporting broadband expansion in Paraguay by providing the equivalent of $70 million in financing in the local currency, guaraníes, to local mobile service provider Tigo Paraguay.

Tourism

One of the highest-performing sectors globally, tourism is showing robust growth in Latin America and the Caribbean too, with international arrivals estimated to grow from nearly 69 million in 2016 to over 110 million by 2030. Tourism not only generates attractive investment opportunities; it is also one of the largest employers of women and youth, and has a significant impact on economic growth in the smallest and poorest nations in the region. In recent years, the industry has become more aware of the importance of mitigating the impact of climate change, building structures that are more resilient and developing projects that minimize the use of water and energy. IDB Invest supports this industry with financial solutions and advisory services tailored to clients’ needs.