Letter from the President
I am pleased to present the Annual Report for the year 2021, along with the financial statements for the years ending on December 31, 2021, and 2020, pursuant to the provisions of the agreement establishing the Inter-American Investment Corporation, whose brand is IDB Invest.
Latin America and the Caribbean (LAC) is slowly mending from a crisis that threatens earlier efforts to set the region on a path towards greater economic and social progress. A strong, sustainable, and more inclusive recovery requires key contributions from the private sector, the main driver of economic activity and employment in the region, and higher levels of investment to trigger innovation and build up the capital needed for long-term development.
IDB Invest is in a unique position to help LAC countries meet this critical challenge through the private sector. Through our Vision 2025, a roadmap to accelerate the region's recovery and enable sustainable, inclusive growth, we are focused on five priority areas: climate action, gender and diversity, small and medium-size enterprises (SMEs), the digital economy and regional integration and value chains.Continue reading
Letter from the CEO
Latin America and the Caribbean now face a crossroads where we must work to optimize the many opportunities to build a different and better world.
We all want a fairer, more sustainable region, more committed to nature, more inclusive, with a better balance between rural and urban areas, with respect for minorities and in which gender equality is defended. The question is how to get there.
In 2021 IDB Invest played a very active role in pursuing such goals. As a development bank, we used our capital and mobilized additional resources to invest in private sector projects to accelerate sustainable economic growth and inclusion.
In the second year of the pandemic, our institution surpassed all its operational goals, delivering our highest-ever lending volume to the region.
That’s a track record we want to build upon, but there’s more to come.Continue reading
Annual Report 2021 Stories
Discover through the stories of our 2021 Annual Report how we are generating sustainable impact together with IDB Invest clients.
Our Approach: Investing in Green and Inclusive Growth
During the second year of the pandemic, LAC faced the daunting task of recovering from the worst socio-economic crisis in more than a century.
Given the disproportionate impact of the crisis on vulnerable populations, increased risks from climate change, and public sector constraints in confronting these challenges, a successful recovery must be a sustainable and inclusive one – and private-sector-led.
At our 2021 Annual Meeting in Barranquilla, IDB President Mauricio Claver-Carone outlined our Vision 2025, a roadmap to accelerate the recovery and achieve sustainable, inclusive growth.
To meet this challenge, we honed in on five opportunities: taking bolder climate action, promoting gender equity and inclusion, deepening regional integration and strengthening value chains, promoting a digital economy, and supporting small and medium-sized firms to narrow an estimated $1 trillion financing gap.
• FIVE OPPORTUNITIESopen/close
Our sustainable investment approach is key to this action. To maximize our impact, we select the most suitable clients & partners and leverage our sector knowledge and our products & services expertise to create value propositions underpinning solutions that meet our clients´ needs while helping them embed sustainability in their strategy and operations.
Despite challenging market conditions, IDB Invest continued to deliver a counter-cyclical response to the region and attract external capital through core mobilization.
Moreover, we executed 100% of our 2021 global funding program under the newly launched Sustainable Debt Framework. This speaks to IDB Invest’s commitment to environmental and social impact and sparked interest among investors in considering Environmental, Social, and Governance (ESG) factors around the world.
We also increased the use of innovative financing to draw new investors to the region, including the issuance of the first blue bond in LAC to support clean water and ocean conservancy projects.
By the end of the year, IDB Invest met all operational goals to support the region as it transitioned from crisis to recovery. Total commitments reached $6.3 billion, and core mobilization reached a record-breaking $3 billion. Moreover, we surpassed most of our sustainability targets: Gender 50%, SMEs 37%, and Digitalization 18%. In terms of climate, 53% of our long-term transactions included a climate component, above the 40% target; this represented 31% of our long-term commitments and 23% of our total commitments, below our 30% target for total commitments.
Vision 2025 is helping us lay a foundation for long-term, inclusive and sustainable growth in LAC. An increase in the IDB Group’s financial capacity, so that it can strengthen its value proposition to effectively address the region's historical development challenges, would multiply our impact.
• THREE MAJOR MILESTONESopen/close
IDB Invest reached three major milestones in 2021 that will help it strengthen its profile as a sustainable supranational issuer:
Standard & Poor’s raised its long-term credit rating for IDB Invest to AA+ from AA, citing its consistent track record in executing its expanded mandate and strengthened operation capabilities, risk practices, and systems.
IDB Invest established a Sustainable Debt Framework and executed its entire 2021 funding program under it, including its inaugural sustainable debt listed on the London Stock Exchange at $1 billion. The framework adheres to the green and social bond principles and guidelines espoused by the International Capital Markets Association.
IDB Invest issued the first blue bond in LAC, an AU$50 million (approximately $37 million), 10-year bond, to support clean water and ocean conservancy projects.
The pandemic continued to affect the development and implementation of infrastructure projects across LAC. Certain categories of infrastructure, mainly those exposed to demand risks, such as airports, ports, and toll roads, were considerably impacted. Supply-chain disruptions, labor constraints, and temporary work stoppages caused delays and cost overruns in construction.
Projects that were in pipeline or under construction before the pandemic have largely continued; however, in many cases, ongoing market uncertainty slowed the structuring of new projects. Additionally, the effects of the pandemic and uncertainty related to the region’s economic recovery are causing sponsors of large projects to delay their investment decisions.
IDB Invest’s expertise in the infrastructure and energy segments enabled it to continue structuring groundbreaking solutions to respond to challenges caused by the pandemic. That includes projects like a floating storage regasification unit in El Salvador. Among the standout deals:
• WORLD'S FIRST CERTIFICATE FOR GREEN TRANSMISSION LINESopen/close
IDB Invest provided an innovative solution in financing the Tacuarembó-Salto transmission line in Uruguay, which became the first project to receive IDB Invest’s pioneering green transmission line certificate. This investment will help strengthen the national transmission system and incorporate additional renewable energy generation capacity in the country.
• FIRST LIQUIDITY SOLUTIONS FOR CHILE'S ENERGY SECTORopen/close
Following a new regulation in Chile that froze electricity rates in pesos, IDB Invest provided a liquidity solution for generators by acquiring credit rights in the form of accounts receivable recognized by the National Energy Commission. To monetize these credit rights, IDB Invest structured supply chain finance and capital markets solutions that mobilized resources from international investment banking partners, reducing the pressure for rate increases for end-consumers in the local market.
• FIRST INVESTMENT IN BARBADOS: PORT OF BRIDGETOWNopen/close
During 2021, IDB Invest committed a loan to Barbados Port Inc. to fund capital improvements to one of its main berths, as well as to install a waste-to-energy system and increase the port’s access to renewable energy.
This is the first investment of IDB Invest in Barbados since consolidating its private sector offerings in 2016, underscoring the IDB Group's commitment to increase its footprint in the small and island countries of the Caribbean.
• PROJECT BOND TO FINANCE PARAGUAY'S FIRST PPPopen/close
IDB Invest provided an innovative financial structure for the Ruta 2 and Ruta 7 toll roads in Paraguay, that will help reduce travel times and costs as well as improve road quality and safety.
The fresh financing complements the original financial package from 2019, better reflecting construction progress to date through a bond designed to attract investors who typically don’t take on construction risk.
• INCREASING INTEGRATION THROUGH COLOMBIAN PORTopen/close
IDB Invest supported a project for the construction, operation and maintenance of Puerto de Antioquia in Colombia, a new multipurpose port facility that will strengthen the country’s foreign trade, particularly benefiting rural producers by boosting their exports’ competitiveness and expanding their presence in international markets.
Financial systems across the region proved to be resilient as the recovery got underway, carrying high liquidity, remaining well-capitalized, and carefully planning funding strategies to support portfolio growth. On the investment funds side, we witnessed an increasing appetite for new fund launches focused on sustainability, MSMEs and digitalization.
In 2021 more financial institutions embraced sustainable financing as a key component of their business strategy. IDB Invest continued to play a leadership role by creating integrated value propositions to help clients advance this agenda and create capabilities for an effective sustainable transformation of the financial sector.
Demand to address the MSME financing gap continued to be strong and will be key during the recovery. The pandemic also accelerated the financial sector’s digital transformation, which will provide new opportunities to contribute to the financial inclusion of underserved segments. Standout deals included:
• INCREASING ACCESS TO THE DIGITAL ECONOMY IN BRAZILopen/close
IDB Invest supported Banco PAN (Brazil) through a loan and mobilization efforts to increase financing and access to digital financial products and services for low-income individuals.
The project is also expected to make a positive economic contribution by promoting lending to microentrepreneurs and underserved segments such as retirees.
• INVESTING IN INCLUSIVE BANKING IN PERUopen/close
IDB Invest experienced an increasing market demand for financial products supporting gender equity, diversity, and inclusion. For example, the local currency financing to Peru’s Caja Municipal de Ahorro y Crédito Cusco will benefit women business owners and improve services for indigenous populations.
The deal will also provide advisory services to Caja Cusco to define a strategy to scale up MSME agricultural output for indigenous and traditional populations.
• DIGITAL DISRUPTIONopen/close
IDB Invest explored several opportunities for partnering with traditional and non-traditional financial institutions that are leveraging digital technology to improve products and services that attend to underserved populations.
For example, IDB Invest took an equity participation in Kubo Financiero (Mexico), a leading digital-first financial services disruptor offering a wide range of financial services to customers – and a company that had earlier received a grant and a loan from IDB Lab to test and improve its business model.
In addition, a loan to Argentina’s Banco Comafi will support technology modernization initiatives benefiting the SME segment.
• GREEN CONSTRUCTIONopen/close
In 2021, the development of capital markets in the region and the focus on supporting the thematic bond asset class continued to be a priority through financial intermediaries.
At COP26, we announced a loan to Guatemala’s Banco Agromercantil to promote green construction and mobility projects, and a green bond from Sicredi, a leading Brazilian cooperative financial institution, was structured and subscribed to continue supporting the green agenda.
• CLOSING FINANCING GAPSopen/close
To continue diversifying its client base, IDB Invest supported specialized non-banking financial institutions with a clear commitment to financial inclusion in countries such as Peru, Brazil, Colombia, Guatemala, Chile, Mexico, Panama and El Salvador.
We also continued work with fund managers to contribute to the reduction of the main financing gaps and renewed our active strategy with Fund Managers.
For example, IDB Invest invested in CASEIF IV L.P., a new mezzanine debt and private equity fund managed by LAFISE Investment Management Ltd. that will provide mezzanine financing and equity for high-growth potential mid-sized companies in Central America, Panama, the Dominican Republic, as well as in Colombia.
IDB Invest contributed to supporting investments, job creation and sustainable business models in a variety of sectors including agribusiness, manufacturing, telecommunications, media and technology, and tourism.
We experienced increased demand from companies striving to address the impact of climate change in areas such as smart-agriculture, circular economy, electromobility, and energy efficiency, among others. IDB Invest’s integrated value proposition and experience in these agendas have been of key relevance.
We prioritized projects that supported regional integration and value chain activity, aligned with Vision 2025, fostering growth in exports, trade, and services that promote job creation. Also, IDB Invest continued supporting liquidity needs across major anchor companies participating in the account payables program. Complementing those efforts, several new working capital facilities were structured to provide support to existing value chains and address short-term financing needs.
Digitalization was also a key priority addressed not only through activity in the Telecom, Media and Technology sectors but also via equity investments across the retail and agribusiness sectors. These were often implemented using digitally-enabled business models.
Agribusiness was relatively less impacted by the COVID-19 pandemic, as demand for primary products remained strong. Nevertheless, the sector continued experiencing logistical problems and disruptions in the workforce.
Several companies put on hold their long-term investment plans and experienced a diminished risk appetite from commercial banks that traditionally financed the sector. In this context, companies continued their efforts to diversify their client base.
IDB Invest supported the demand for capital expenditures in climate-smart agriculture projects to expand production capacity, increase productivity and promote international expansion.
LAC’s manufacturing sector continued facing a very challenging environment, with new investments being delayed as demand showed mixed behaviors. Many players experienced supply-chain disruptions and human-resource constraints, but some specific industries saw stronger demand, including pharmaceuticals and retail businesses.
IDB Invest continued identifying those projects with solid bases for new capital investments and committed to sustainability and ESG factors, as well as providing liquidity relief to MSMEs through short-term products such as account payables/reverse factoring facilities.
In this context, manufacturing projects continued supporting job creation, value chains mostly composed by MSMEs, productivity gains, improved energy efficiency, social housing, regional integration, and exports increase. Some examples included:
• STRENGHTHENING VALUE CHAINSopen/close
Manufacturing supported the objective of strengthening regional value chains with projects in the pharmaceutical subsector such as Calox in Costa Rica and Procaps in Colombia.
Another example of the focus on job creation and internationalization of businesses is the financing to Masisa, a Chilean wood products company that also operates in Mexico and Argentina, with a commercial presence in many other markets.
IDB Invest will contribute to developing a Circular Economy Strategy to enhance the adoption of circular and sustainable solutions in Masisa’s product catalog.
• SUPPORTING URBAN DEVELOPMENTopen/close
In Mexico, IDB Invest provided working capital financing to GIM Habitacional with the objective of promoting access to affordable housing through a greater supply of social and middle-income housing.
In Peru, our recent financing deal with Menorca targets urban site development and low-cost housing projects for low- and middle-income families.
In 2021, the Telecommunications, Media and Technology sectors experienced an important opportunity for growth as the pandemic pushed consumers and corporations to increase online interactions, prompting a historical boom within the digital ecosystem throughout the region.
Social distancing requirements imposed by the pandemic and the faster pace of technology adoption by end-consumers and corporations favored the consolidation of tech-enabled business models that contribute to increasing productivity, innovation and better access to services and transformation.
IDB Invest continued supporting disruptive digital-first business models across LAC. For example:
• RETAIL DIGITALIZATIONopen/close
Through an equity investment in RecargaPay, a FinTech in Brazil that enables digital payments for consumers, IDB Invest aims to accelerate the adoption of digital payments, particularly among underserved sectors.
Additionally, through an equity investment in Merqueo in partnership with the Clean Technology Fund, IDB Invest supports the expansion plans of one of the largest full-stack grocery delivery players in LAC.
• DISRUPTIVE BUSINESS MODELSopen/close
A recent follow-on investment in Frete.com to supplement our first investment made in 2020 led to a valuation of more than $1 billion for the leading freight marketplace in South America. The investment highlights the relevant continuum and strong synergies that exist between IDB Lab and IDB Invest.
The company is being supported by the Valor Capital family of funds, in which both IDB Lab and IDB Invest are involved. Similarly, Frete has NXTP I (a historical portfolio investment of IDB Lab) as an early investor. Such a combined approach was instrumental to our successful positioning in this disruptive logistics marketplace.
• TELECOM INFRASTRUCTUREopen/close
Another key priority to unlock the benefits of increasing digitalization is to finance the evolution of the telecommunications infrastructure, with transactions like QMC Regional Facility, which supports investments in towers, distributed antenna systems, and street-level solutions in Mexico, Colombia, and Peru.
Similarly, in Ecuador, IDB Invest mobilized resources to promote the shared telecommunications infrastructure market with Phoenix Tower International. The project will improve the sector’s productivity and contribute to reducing the connectivity gap in Ecuador, through increased mobile broadband networks and reduced operator costs.
Tourism continues to be one of the most affected sectors in LAC given the lingering effects of the pandemic. Border restrictions, business closures and uneven vaccination rates throughout the region are still curbing consumer confidence and resulting in reduced international travel.
However, the industry reached an important inflection point in 2021 and started to experience a gradual improvement in fundamentals, driven in particular by domestic leisure travel and increased vaccination rates. With a return of corporate and group travel, the tourism sector is anticipated to continue on a recovery path.
Nevertheless, in the short-term, liquidity needs across the entire tourism value chain persist, while traditional commercial banks have remained averse to increasing their exposure to tourism given the uncertain environment. This resulted in IDB Invest adjusting its tourism strategy to focus on: (1) supporting the working capital needs of regional tourism portfolios so that they can remain solvent and reopen their operations, and (2) incentivizing local commercial banks to continue to support the liquidity needs of tourism businesses by offering sovereign and private sector guarantees.
SMALL AND ISLAND COUNTRIESopen/close
IDB Invest has an express mandate from its Board of Governors to step up its activities in countries that historically received less lending from the IDB Group’s non-sovereign guaranteed operations. An emphasis is placed on projects with potential to help small and medium-sized businesses boost their productivity as well as to address different social and environmental challenges, ranging from gender equity to climate risks.
During 2021, long-term commitments for projects in Small & Island Countries were $213 million. This financing represented 7% of IDB Invest’s total commitments, under the 10% institutional goal. Some of the notable deals closed during the year were:
• SEAF Caribbean SME Growth Fund. IDB Invest provided $10 million in financing for SEAF, an impact investment firm specialized in emerging and frontier markets. The fund will focus on SMEs with the potential to generate economic growth and yield social and environmental benefits. A complementary CAD$10 million contribution of blended finance from a Canadian government fund will help businesses invest in climate resilience and risk mitigation or cover post-disaster recovery expenditures. This operation was particularly timely as the Caribbean was one of the regions hardest hit economically by the pandemic.
• JMMB Bank. A $35 million loan from IDB Invest, coupled with $31 million in additional financing mobilized from impact investors such as BlueOrchard Finance, Symbiotics and responsAbility, will enable this Jamaican commercial bank with a long tradition of working with female entrepreneurs to expand its credit services for SMEs, as well as to diversify its funding sources. As part of the project, JMMB Bank will also develop and adopt an environmental and social management system, as well as bolster its talent recruitment and retention policies.
• IDB Invest is also committed to addressing the particular ESG challenges of Small and Island Countries such as the practice of de-risking, which can deprive them of access to international banking services. For example, in 2021 it assisted ACME, a Haitian microfinance institution, in strengthening its compliance program and its capacity to identify and deal with money laundering and terrorism financing risks.
Sustainability & Impact
Sustainability is a core value at IDB Invest and a key component to building back better in the region’s economic recovery. It cuts across every sector, whether we are expanding access to credit for women entrepreneurs, supporting climate-smart agriculture, or financing resilient infrastructure.
By working with clients and investors to put sustainability into practice, we are helping them become more profitable over time and reinforcing our commitment to increasing development impact. We’re part of a transition to an economy that delivers returns while fulfilling a role in society.
In 2021, we consolidated our non-financial offerings to better serve our clients and achieve greater impact in development. In alignment with our Vision 2025, IDB Invest’s advisory services are focused on key topics: climate change; gender, diversity and inclusion; MSMEs; digitalization; public-private partnerships; environmental and social risk management, as well as corporate governance and transparency.
Working at a market level, IDB Invest’s advisory services seek to drive development agendas, address market gaps and build up skills that can benefit entire business sectors. For example, in 2021 we partnered with 18 stock exchanges to promote gender-lens investing as a means to increase gender equality in the private sector.
In 2021 IDB Invest initiated a total of 86 new advisory services, pursuing goals as diverse as helping clients adopt digital solutions to improve access to finance for under-served populations or to enhance the traceability of ESG issues across complex supply chains.
• CLIMATE ACTIONopen/close
As part of IDB Group’s commitment to align our portfolio to the Paris Agreement by 2023, we are working with clients and investors to unlock climate finance and drive climate action in the region.
In 2021, this included applying the Climate Risk Assessment methodology during due diligence in 40 projects. We also built capacity with clients on integrating physical climate risk management within environmental and social management systems.
For the first time, IDB Invest supported the construction of renewable energy projects in Peru, Colombia and Jamaica, financing wind, solar and distributed generation projects. Also, during the year IDB Invest further expanded its portfolios in Brazil and Mexico through the support of new renewable energy investments.
Another key area of activity is helping LAC financial institutions grow green portfolios, reaching a total of 45 green lines in 16 countries of the region. In Guatemala, for example, we helped Promerica conduct an in-depth diagnosis to better understand the barriers and drivers for MSMEs to apply for green loans.
• GENDER, DIVERSITY AND INCLUSIONopen/close
IDB Invest is committed to working with its clients to strengthen gender equality and promote the inclusion of members of groups such as Afro-descendants, indigenous and traditional peoples, persons with disabilities and individuals in the LGBT+ community.
IDB Invest advances this agenda by developing tools to improve markets, fostering financial innovations, generating and disseminating more knowledge, and putting together broader partnerships.
IDB Invest is a pioneering promoter of social bonds, assisting many clients in tapping impact-driven investors, and is working with various global supply chains to expand opportunities for women-owned or led businesses to gain access to local and export markets.
In addition, IDB Invest has started to use performance-based incentives to pursue diversity and inclusion goals, for example in the case of Brazil’s Atlas.
• ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)open/close
IDB Invest is a market leader in integrating ESG sustainability solutions throughout the investment process.
In 2021 we strengthened our sustainable value proposition through the rollout of our new Environmental and Social Sustainability Policy and proactively scaled up engagement with clients, investors and development practitioners to mainstream the adoption of state-of-the-art ESG practices.
We conducted ESG due diligence for more than 80 new projects in 2021, helping clients embed data-driven decision-making tools in their business strategies and adopt solutions to improve their sustainability performance.
In addition, IDB Invest developed knowledge products to raise awareness, provide guidance and enhance clients’ capacity to deliver sustainable performance.
• MANAGING IMPACTopen/close
Impact is at the core of IDB Invest’s mission of promoting sustainable and inclusive development. In recent years, appetite for investing for impact has grown substantially. At the same time, the need for common impact measurement standards has become essential for a broad range of actors dedicated to mobilizing resources for development.
IDB Invest’s end-to-end Impact Management Framework serves as an industry benchmark in how to monitor, measure, and evaluate the development impact results of projects. Our DELTA tool, for example, measuring and monitoring the impact of projects before and during each stage of their operating cycle, is not only useful to us to analyze the effectiveness of our financing decisions, it has also become a reference metric for other institutions and corporations committed to development.
As a signatory of the Operating Principles for Impact Management, which helps guide investors and other parties interested in analyzing impact throughout the entire lifecycle of development projects, IDB Invest publishes annual reports on how its operations align with its principles and periodically has those results independently verified.
In addition, during 2021 IDB Invest participated actively in the G7 Impact Taskforce Working Group on Impact Transparency, Integrity, and Reporting, which made recommendations on scaling the impact investing industry and mobilizing private capital for positive impact.
Financing & Risk Management
In LAC, the estimated gap between current levels of development financing and the amounts needed to meet the UN Sustainable Development Goals has been estimated at over $650 billion annually, which stretches far beyond the capacity of development finance institutions. In consequence, IDB Invest has a duty to mobilize more resources from traditional partners as well as impact investors seeking to achieve social and environmental goals.
Our regional expertise, early project access and seal of approval make us an entry point for such investors. During 2021 IDB Invest sought to increase not only the total amount of mobilized resources, but also the number of projects with a mobilization component, allowing us to increase the ratio of mobilized resources to own-account long-term commitments to 0.95.
Overall, more than 50 transactions with mobilization instruments were executed in 2021. Core mobilization reached $2.97 billion, an increase of 29% over the previous year, and more than double the amount achieved in 2019, delivering the highest amount ever mobilized in a year in the history of private sector operations of the IDB Group.
This was possible due to the mobilization team’s early involvement in project origination efforts and structuring. This led to a higher number of projects with mobilization component as a part of the value proposition, together with an increasing number of active mobilization partners with an appetite to participate in IDB Invest projects.
Some of the milestones include:
- • The issuance of the first B-Bond in which investors take construction risk, for the Cardal-Punta del Tigre project in Uruguay.
- • The mobilization of more than $530 million through Debt Capital Markets instruments, such as package deals that supported an electricity rate stabilization mechanism implemented in Chile under Law 21.185.
- • The structuring of the largest syndication in the last four years for a financial institution. In this deal, IDB Invest arranged a syndicated loan with 13 investors to support women-led SMEs in Brazil through Daycoval.
- • Increased synergies with other development financial institutions such as IFC, Proparco, Findev and DEG.
Despite the impact of ratings downgrades in the region in 2021 making it more expensive for sovereigns and corporates to raise capital, IDB Invest continued to generate a steady stream of bankable assets and acting as a conduit to place those assets with investors of varying risk appetites.
Relationships with insurance companies were strengthened as the Unfunded Credit Protection instrument continued to mature to actively manage IDB Invest pipeline and portfolio by incorporating a new pool of investors to expand our capabilities to support projects.
Looking ahead, IDB Invest’s growing toolbox of mobilization products and expanded presence among investors looking for investment opportunities in the region will result in increased crowding in of private capital and optimized risk management, increasing IDB Invest's overall impact and the resilience of its balance sheet.
• RISK MANAGEMENTopen/close
During 2021, IDB Invest continued to integrate financial and non-financial risk management at the project and portfolio level to better serve its clients, achieve greater impact and ensure the overall sustainability of IDB Invest.
IDB Invest strengthened its approach to managing ESG risks with the creation of a new team to guide and assess environmental and social risk at the corporate level with a mandate to strengthen compliance, learning, and impact for IDB Invest.
At the same time, IDB Invest strengthened its operational risk management and internal controls in keeping with the increasing scale and scope of the organization.
IDB Invest’s financial risk management framework encompasses a Risk Appetite Policy, a Capital Adequacy Policy, and a Liquidity Policy.
As part of a triennial review, those policies were updated in 2021, formally establishing a buffer zone to the Capital Adequacy Ratio and including stress test requirements.
As we deepened our footprint throughout the region, IDB Invest maintained a healthy and well-diversified portfolio despite the complex global and regional environment.
• FUNDING STRATEGY AND TREASURYopen/close
IDB Invest issues bonds in the international markets to maintain appropriate liquidity levels and its top credit ratings. We diversify our funding sources and optimize our cost of funding by issuing in different markets and currencies.
We also promote the development of local capital markets in Latin America and the Caribbean through the issuance of local currency bonds in domestic markets to finance local currency projects.
Investors are met on an ongoing basis to promote upcoming bond issues and to inform them about our business, our impact and our financial performance. Since the onset of the pandemic, all roadshows have taken place in virtual format.
In 2021 we performed a global roadshow to promote our Sustainable Debt Framework amongst investors in the Americas, Europe and Asia besides roadshows in Mexico and in Australia.
Under its Sustainable Debt Framework, launched with a virtual global roadshow, IDB Invest issued the following bonds:
- • An inaugural sustainable debt issue on the London Stock Exchange, a $1 billion, 5-year sustainability bond priced in February to finance both green and social projects.
- • A MXN2.5 billion (approximately $119 million), 3-year gender bond priced in March, highlighting IDB Invest’s commitment both to promote gender equality and to develop local capital markets. This was the first gender bond issued by an international development lender in the region.
- • A debut bond under its Australian Debt Issuance Program, priced in June, an AU$400 million (approximately $300 million), 5-year social bond.
- • Two green bonds, underscoring IDB Invest’s commitment to climate action: a $100 million, 10-year transition bond in June, and an AU $68 million (approximately $49 million), 10-year decarbonization bond in September.
- • IDB Invest concluded its 2021 funding program in November with the first blue bond ever issued for LAC, an AU$50 million (approximately $37 million), 10-year blue bond.
Executing 100% of its 2021 global funding program under the Sustainable Debt Framework in the first year of its inception speaks to IDB Invest’s commitment to environmental and social impact and sparked interest among ESG investors around the world. In total, IDB Invest issued bonds with a nominal amount of $1.6 billion and an average maturity of 5.4 years.
Under its liquidity policy, IDB Invest must maintain a liquid asset portfolio of sufficient size to fulfill its current commitments and projected new commitments for a period currently of at least 15 months under the assumption of market stress.
These resources are invested in liquid assets of high credit quality and managed to optimize diversification and yield within approved counterparty and market risk limits.
IDB Invest’s liquidity portfolio stood at $2 billion as of December 31, 2021, compared with $2.1 billion one year earlier. Most of the portfolio consists of assets denominated in U.S. dollars, with a small part denominated in Mexican pesos, which is funded in the same currency to eliminate any currency risk.
Knowledge & Communications
IDB Invest generates and disseminates knowledge and lessons learned from its experience as a development practitioner to enhance the impact of its projects. During 2021 we organized virtual events on a variety of sustainability topics, ranging from sustainable agribusiness to the environmental and social management of investment funds.
For example, in September we held the AgriLAC forum, a virtual event to share best practices in sustainability and the agribusiness value chain, drawing more than 5,000 participants from corporations, financial institutions, non-profits and investors, and almost 12,000 online viewers in streaming.
In addition, IDB Invest and the IDB launched a webinar series to promote the Gender Parity Initiative. On this theme, a joint publication with BID Intal – “An unequal Olympiad: gender equity in Latin American and Caribbean companies” – looked at gender gaps in 1,015 companies in 20 countries.
IDB Invest also developed several practical guides on topics including the blue economy, thematic bonds, digital readiness for financial cooperatives, and strengthening climate change resilience in ports.
Throughout 2021 IDB Invest generated more than 8.2K media mentions and reached more than 13 million people through social media. Likewise, the corporate blog Negocios Sostenibles increased its audience by 34%.
A new partnership was launched in the middle of the year with Bloomberg News, which is republishing all of the blog's content on its financial news terminals.
IDB Invest also made significant progress on its Knowledge Ecosystem. The IDB Invest Knowledge Appstore - The Knowledge Engine - went live in 2021, allowing users to interact with knowledge assets in new ways to promote a knowledge-sharing culture and enhance employee productivity.
IDB Invest reached the EDGE Move certification level, a recognition of its strong commitment to gender parity in the workplace. The result of a 5-year institutional effort, the certification highlighted the number of women in leadership positions, flexible working practices and support to caregivers, and the proportionate retention along the talent pipeline, which has met the minimum threshold for substantive women representation of 30%.
The EDGE assessment captured IDB Invest’s increasing commitment to investigate intersectional issues related to gender identity and race/ethnicity, reflecting our efforts beyond gender, toward diversity in a broader way.
We have a well-balanced workforce (51.8% men and 48.3% women) and gender parity at the managerial level, a reflection of long-term efforts on that front.
• SOCIAL INFRASTRUCTURE, WATER AND ROADSopen/close
• SOLAR AND MIXED RENEWABLESopen/close
• LOANS AND PRIVATE EQUITYopen/close
• MANUFACTURING AND AGRICULTUREopen/close
IDB Invest promotes the economic development of its regional developing member countries by encouraging the establishment, expansion, and modernization of private enterprises in such a way as to supplement the activities of the IDB.
IDB Invest aims to be the leading financial institution with the knowledge and expertise to invest with impact in Latin America and the Caribbean and to connect its countries and private sector investments with the UN Sustainable Development Goals.
Guided by the principles of strengthening development effectiveness, IDB Invest contributes to the development and maximization of the efficient use of resources and synergies between activities with the public and private sectors of the IDB Group. IDB Invest is responsible for all non-sovereign guaranteed operations of the IDB Group (including non-sovereign guaranteed operations with state-owned enterprises).
OUR MEMBER COUNTRIESopen/close
Argentina, Austria, The Bahamas, Barbados, Belgium, Belize, Bolivia, Brazil, Canada, Chile, the People’s Republic of China, Colombia, Costa Rica, Croatia, Denmark, the Dominican Republic, Ecuador, El Salvador, Finland, France, Germany, Guatemala, Guyana, Haiti, Honduras, Israel, Italy, Jamaica, Japan, Republic of Korea, Mexico, the Netherlands, Nicaragua, Norway, Panama, Paraguay, Peru, Portugal, Slovenia, Spain, Suriname, Sweden, Switzerland, Trinidad and Tobago, the United States of America, Uruguay, and the Bolivarian Republic of Venezuela.
BOARD OF GOVERNORSopen/close
All the powers of IDB Invest are vested in its Board of Governors, consisting of one governor and one alternate governor appointed by each member country. The Board of Governors has delegated to the Board of Executive Directors all its powers except certain powers reserved to the Governors under the Agreement Establishing the Inter-American Investment Corporation.
BOARD OF EXECUTIVE DIRECTORSopen/close
The Board of Executive Directors oversees the operations of IDB Invest and exercises all the powers granted to it under the Agreement Establishing the Inter-American Investment Corporation or delegated to it by the Board of Governors.
The 13 executive directors and their alternate executive directors serve three-year terms, representing one or more member countries. The Board of Executive Directors establishes the basic organizational structure of IDB Invest and approves the institution’s budget as well as all loans and investments with certain exceptions where this authority has been delegated to Management.
Inter-American Development Bank President Mauricio J. Claver-Carone serves as ex-officio Chair of the Board of Executive Directors of IDB Invest.
As General Manager and CEO of IDB Invest, James P. Scriven handles the day-to-day business and is responsible for establishing its operational structure and appointing its senior management and staff.
IDB Invest’s senior management is a gender-balanced team of professionals from both borrowing and donor member countries of the IDB Group. Collectively they draw from a wealth of experience in international development, national government, commercial and investment banking, risk management and the law.
During 2021 there was a significant change in the senior management team. Chief Strategy Officer Orlando Ferreira was appointed Chief Financial Officer. He was replaced as Chief Strategy Officer by former IDB Vice President for Countries Alexandre Meira da Rosa.
To fulfill its development mission, IDB Invest has 460 employees distributed in five departments. Of the total, 30% of employees are located in 24 of the IDB Group’s 26 offices in Latin America and the Caribbean: Argentina, The Bahamas, Barbados, Belize, Brazil, Bolivia, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Honduras, Haiti, Jamaica, Mexico, Panama, Paraguay, Peru, Suriname, Trinidad and Tobago, and Uruguay. The rest of the staff are located at IDB Invest headquarters in Washington, D.C.