Letter from the President
Pursuant to the provisions of the agreement establishing the Inter-American Investment Corporation, whose brand is IDB Invest, I am pleased to present the Annual Report for the year 2020, along with the financial statements for the years ended December 31, 2020 and 2019.
This report provides the corporate and operational results of 2020, containing a summary of IDB Invest’s main achievements and key milestones for 2020, a year marked by the devastation caused by the COVID-19 pandemic.
Latin America and the Caribbean have been disproportionately ravaged by COVID-19. Experts predict the pandemic could set the region back 10 years economically and socially. A strong, speedy and more inclusive recovery will require a revitalized private sector, with businesses capable of bouncing back into production, creating jobs and generating new opportunities through innovation and a vision to build back better. Under its expanded mandate, IDB Invest is uniquely equipped to assist LAC businesses in meeting this critical challenge.Continue reading
Letter from the CEO
During 2020 Latin America and the Caribbean were at the epicenter of the global crisis caused by the COVID-19 pandemic. Adding to a devastating toll of lives and livelihoods lost, no other region in the world suffered a sharper drop in its GDP, a setback that risks wiping out the social and economic gains LAC had made over the previous 10 years.
As a development institution, the IDB Group must help its borrowing member countries avoid another lost decade. At a time when governments are battling the pandemic and operating with fiscal constraints, the private sector will have to play a leading role in driving the recovery. The challenge ahead is formidable, but IDB Invest is ready to do its part in working with LAC companies to build back better and deliver outstanding economic, social and environmental results.
This report lays out how IDB Invest responded to this unprecedented emergency and how it plans to work going ahead. Last year’s results should give member countries every confidence that the institution they renovated and strengthened five years ago to boost development through the private sector is meeting their expectations.Continue reading
IDB INVEST STORIES
On top of causing the loss of nearly half a million lives in Latin America and the Caribbean during 2020, the COVID-19 crisis took a devastating economic toll in the region, suffering its biggest GDP contraction in more than a century.
Lockdowns, travel bans and other measures to contain the pandemic paralyzed entire sectors, leading to the loss of millions of jobs and pushing millions of people into poverty. LAC risks losing many of the economic and social gains it had made over the previous two decades. The extraordinary extent of the crisis demanded extraordinary responses.
With the backing of its Board of Executive Directors, as the first cases of coronavirus were reported in the region, IDB Invest put together a COVID-19 crisis response plan. As the IDB Group institution charged with promoting development through the private sector, it would play a counter-cyclical role, providing much needed financing as other lenders withdrew. If 2020 had been a regular year, IDB Invest would have aimed to mobilize around US$4.5 billion, counting its own financing and third-party resources.
The response plan allowed for a record expansion of financing capacity to US$7 billion. By the end of the year, IDB Invest met all operational goals defined in its strategic response to COVID-19. Total approvals reached US$9.1billion including mobilization efforts. Commitments reached US$6.2 billion, and core mobilization reached US$2.3 billion, a record milestone under such difficult circumstances.
IDB Invest’s response plan was based on six core elements:
1. Focus on the effects of the crisis.
2. Move faster to address its most urgent consequences.
3. Do more than originally planned.
4. Find the right partners and amplify interventions.
5. Ensure a financially sustainable response.
6. Adapt to the operational implications of providing a timely response to the crisis.
We embedded a COVID-19 lens into our Impact Management Framework to assess all projects following the approval of the COVID-19 Response by the Board of Directors. This lens classifies potential transactions in two categories: those that protect and alleviate by targeting the immediate effects of the crisis; and those that will reignite economies aiming at the medium- to long-term effects of the crisis.
Given the speed at which the crisis unfolded and the potentially lasting harm of the economic shock, it was crucial to deliver support quickly. To accelerate resource deployment even as we adapted to distance working, we adopted a series of temporary flexible measures to streamline approval processes.
One such measure was the creation of a US$500 million Crisis Management Facility to assist the urgent liquidity needs of existing clients. Another one was expanding the exposure limit for the Trade Financing Facilitation Program from US$1.5 billion to US$3 billion.
THE CORONAVIRUS DASHBOARDopen/close
Early in the pandemic, governments in LAC started to take a variety of steps to reduce the spread of the virus, such as lockdowns, curfews, schools and businesses closings, travel bans or simply urging people to stay home or observe social distancing. At first, it was difficult to gauge the impact of such measures. To help guide more effective responses to the crisis, it was crucial for countries to obtain timely and accurate information about the effects of the pandemic in the region.
In March, in the span of 10 days, as a testament to the value of the synergies within the IDB Group, together we launched the Coronavirus Impact Dashboard, an instrument designed to measure the real-time effects of virus-related restrictions as a proxy of economic activity. Thanks to our ongoing partnership with the GPS traffic app Waze, we quickly created an index that shows when and where traffic patterns are changing in real time. The wide coverage of the data allowed us to report daily and weekly traffic changes across 23 countries and 67 metropolitan areas. We started looking at data from the Waze traffic app even before the World Health Organization’s declaration of the pandemic on March 11. We noticed significant changes in congestion that could be worth considering by decision-makers across the region.
Additionally, the Dashboard reports daily COVID-19 cases and deaths; shows changes in air quality for 11 cities, and tracks cellphone-based human mobility patterns and public transport usage reported by Moovit. To date, the Dashboard has received more than 60,000 visits from all over the world. Over the past year, the top countries using these data are Colombia, the United States, Brazil, Peru, Mexico, Argentina, and Costa Rica. The Dashboard has also been showcased in regional and international media.
PROJECT HIGHLIGHTS OF OUR COVID-19 RESPONSEopen/close
1. Infrastructure–AES (El Salvador):
A US$60 million Account Receivables Facility to finance the payment deferrals of consumer electricity bills in El Salvador. Utilities were impacted by a 3-month suspension and deferral of payments of bills by consumers affected by the epidemic. The electricity consumed during those months will have to be repaid in monthly installments over two years. The facility structured by IDB Invest will address the electric sector’s financing needs stemming from the emergency measures, gradually smoothing out their economic impact.
2. Corporates– Phoenix Tower International (Ecuador):
A US$80 million loan and a B-Loan for US$12 million to help consolidate a business model based on the shared use of telecommunications towers in the Ecuadorian market. The project will also contribute to increase mobile broadband coverage by different mobile network operators. This outcome is especially relevant in the context of the COVID-19 crisis, as networks are experiencing a significant increase in digital data consumption and users require reliable systems due to social distancing measures (telecommuting, telemedicine, online classes, etc.).
3. Financial Institutions– Caja Los Héroes (Chile):
A US$50 million loan to help this social benefits management fund deepen and expand its financial inclusion and digital transformation program, focusing on senior citizens, one of the groups most affected by COVID-19. The program also targets the unbanked population, including low- income individuals and immigrants. As part of the project, the platform will offer access to debit cards and virtual accounts, as well as to financial education resources. IDB Invest will also offer incentives to Caja Los Héroes affiliated companies to join a Gender Parity Task Force.
The pandemic forced governments throughout LAC to prioritize their attention and resources on dealing with the most pressing social and economic consequences of the crisis, limiting their capacity to invest in infrastructure, a sector where the region still faces major challenges.
IDB Invest has a mandate from its member countries to support the participation of LAC’s private sector in the development of more efficient and resilient infrastructure, with an emphasis on expanding and
modernizing the region’s transportation and logistics networks, accelerating the transition to cleaner energy matrices and upgrading social infrastructure such as facilities in the health, education and water and sanitation sectors.
Despite the economic slowdown, last year IDB Invest successfully closed US$952 million in deals to finance infrastructure and energy projects. Among the standout operations of 2020 were:
NEW JUAZEIRO SOLAR ENERGY FARMSopen/close
A US$67.2 million package combining loans from IDB Invest and commercial banks plus concessional resources from the Clean Technology Fund and the Canadian Climate Fund for the Private Sector in the Americas will support the construction of four photovoltaic plants with a combined capacity of 187 MW in the Brazilian state of Bahia. The blended finance will enable the client, Atlas Renewable Energy, to adopt more efficient bifacial solar panels and carry out a diversity action plan to employ more women and Afro-descendants in the project.
EDUCATIONAL INFRASTRUCTURE PPPopen/close
A US$25 million loan will help finance the building of schools, technology parks and sports centers in 16 of Uruguay’s 19 departments under a public-private partnership between the National Public Education Administration and a consortium of local construction and engineering firms. The project will expand access to education and training demanded by the jobs market outside major urban areas.
A financing package in Brazilian reais for the equivalent of US$179 million will help SABESP, the largest water and sanitation company in Latin America, to expand the treatment of wastewater polluting a river that runs through part of the city of São Paulo. The utility will add its own solar energy generation capacity to power water treatment plants and reduce its carbon footprint.
The economic crisis precipitated by the COVID-19 pandemic took a heavy toll among businesses of all sizes in Latin America and the Caribbean, but it was especially devastating for smaller enterprises.
The emergency gave an even greater sense of urgency to IDB Invest’s work with financial institutions, which seeks to narrow the financing gap faced by the region, namely in four priority areas:
- Capital market strengthening and leading the thematic bonds asset class.
- Partnering with specialized financial institutions to promote financial inclusion.
- Supporting SME access to finance.
- Promoting exports and imports through the Trade Finance Facilitation Program (TFFP).
Notwithstanding the slowdown...
IDB Invest succeeded in booking US$1.4 billion in commitments for projects involving financial institutions and specialized investment funds. Some of the highlights of 2020 were:
EXPANDED SUPPORT FOR TRADE FINANCINGopen/close
IDB Invest stepped up its Trade Finance Facilitation Program by establishing 27 new or renovated lines of credit totaling more than US$1 billion and boosting over 30 existing lines by more than US$500 million. As a result, TFFP operations rose by 57% over 2019.
LIQUIDITY RELIEF FOR PANDEMIC-AFFECTED MICROLENDERSopen/close
A one-year, US$60 million loan will assist Bancoldex, Colombia’s national development bank, in expanding emergency credit lines for microfinance entities operating in rural areas, where low-income clients have little or no access to commercial banks.
SUPPORT TO THE DEVELOPMENT OF LOCAL SUPPLIERopen/close
A loan of up to US$16 million to Demerara Distillers—one of the main economic groups in Guyana—to finance the installation of new processing and packaging lines for its natural juice and milk products sold in the domestic market.
LAUNCH OF THE FIRST VENTURE DEBT FUNDopen/close
Launch of First Venture Debt fund in the region, in association with Silicon Valley Bank and Partners for Growth. This notable operation in terms of impact and synergies with the IDB Group consists of a $30 million fund with an investment period of four years and a life of eight years, to support. young and high-growth companies in LAC, in sectors such as computer software and technology.
IDB Invest works with a broad range of corporate clients, investing in key sectors for economic and social development in LAC, such as agribusiness, manufacturing, telecommunications, media and technology, and tourism.
In 2020, this segment reached financial closings totaling US$1.13 billion, following an operations plan focused on strengthening
food security, expanding access to mobile broadband, developing financing alternatives for small businesses, and promoting the adoption of digital business models. In addition to those goals, last year IDB Invest supported diverse corporate actions to address the COVID-19 pandemic. Noteworthy transactions included:
WORLD´S LARGEST DISSOLVING PULP PLANTopen/close
A US$1.1 billion financing package led by IDB Invest and the World Bank’s IFC will support a project to build a state-of-the- art mill in Minas Gerais, Brazil, to produce dissolving pulp, which is used to manufacture biodegradable textile fibers. The mill will have its own bioelectricity generation plant, which will also feed the public grid.
URBAN DEVELOPMENT FOR SOCIAL HOUSINGopen/close
A local currency loan for the equivalent of US$40 million will help Peruvian real estate developer Los Portales carry out up to 19 projects in eight cities, aiming to provide affordable homes to some 12,000 low- income, first-time buyers.
MEZZANINE FACILITY FOR SUSTAINABLE TOURISMopen/close
Selina, a chain of lifestyle hotels that runs properties in 12 countries in LAC, will use a US$50 million mezzanine facility to enhance its liquidity during the pandemic and expand its operations in the region as the travel and leisure sector recovers. The deal includes the mobilization of US$15 million from Blue Like an Orange Sustainable Capital, a financial partner of IDB Invest.
SUPPLY CHAIN REVERSE FACTORINGopen/close
In an alliance with a leading business association, Consejo Mexicano de Negocios, IDB Invest is granting loans to major Mexican corporations to establish reverse factoring programs to provide liquidity to SMEs in their supply chains hit by the pandemic. With this initiative, IDB Invest expects to finance between 15 to 20 thousand MSMEs. Among the participants are auto parts manufacturer Rassini Automotriz, industrial conglomerate Grupo Kuo, food processor Sigma Alimentos and construction firm Elementia.
As we focus on building back better and attracting increasingly impact- seeking investors to the region, how we measure and manage the development impact of our operations is key. In 2020, investor interest in best practices for measuring and embedding impact into investment decision-making continued to grow.
In line with market demand, we published Managing a Portfolio for Impact, a report outlining the innerworkings of IDB Invest’s Impact Management Framework, from how we target high-impact sector opportunities and systematically assess the expected impact of each investment to how we track, evaluate, and disseminate the impact achieved.
Throughout the year we continued to contribute our experience-based knowledge and expertise to the impact management space through a series of blogs, articles, op-eds, videos, and webinars with partners including the Financial Times and Devex.
We have also been active in ongoing conversations around establishing common metrics for measuring social and environmental impact in areas such as climate, gender, and direct jobs. We have been working with other development finance institutions to align the Harmonized Indicators for Private Sector Operations, or HIPSO, with the IRIS+ metrics — the most widely accepted system for measuring and managing impact – and with the Sustainable Development Goals. Likewise, as a member of the Advisory Board of the Operating Principles for Impact Management, we are also helping bring more investors into the impact management fold.
INCREASING RESOURCE MOBILIZATION
Despite the complex financial conditions created by the pandemic during 2020, core mobilization reached US$2.3 billion across 48 executed transactions, the largest volume in the history of the IDB Group, even as many capital market players exhibited higher risk aversion toward emerging markets. To offset these factors, IDB Invest developed new products such as the Unfunded Credit Protection, which helped to broaden the institutional investors base to include international insurance companies.
Some notable examples of deals closed in 2020 include LD Celulose in Brazil, for which IDB Invest mobilized a US$250 million B-loan from commercial banks and a US$50 million parallel loan from the China Co-Financing Fund for LAC. This transaction went on to win the Loan of the Year and Infrastructure Deal of the Year Awards from LatinFinance Magazine.
Another noteworthy transaction is Ferrocarril Sub Debt in Uruguay. This was the first time IDB Invest joined forces with Global Infrastructure Partners, who subscribed a US$67.5 million subordinated B-loan.
We also continued our efforts to expand our investor base, which comprises more than 400 partners all over the world, having historically closed at least one transaction with over half of those investors. Looking ahead, IDB Invest will continue developing innovative instruments to attract more institutional investors and pension funds to the region.
With over US$ 800 million of donor funds under management for blended finance, IDB Invest offers clients incentives to tackle more ambitious economic, social or environmental goals within their projects. In 2020, we committed a record US$97 million in concessional resources in 16 investments. Those funds helped catalyze US$1.6 billion of commercial capital toward low carbon, climate resiliency, gender, and diversity projects.
In Guatemala, for example, IDB Invest structured its first equity investment using blended finance, providing US$5million in capital to Kingo, a decentralized solar energy company that specializes in serving off-grid rural communities. Most of the concessional resources came from the Clean Technology Fund, which participated in the deal requiring that Kingo achieve certain gender-based outcomes.
Despite market uncertainties, during 2020 IDB Invest continued to expand its presence in the local and international capital markets to fund its lending program, issuing bonds for a record US$2.3 billion. Our commitment to offer adequate answers to our clients pushes us to create innovative products and financial solutions. Based on our experience and sustainable business model, we managed to open new markets in the region, expand the existing ones and deliver innovative products that support our clients to growth. As a result, the market recognizes our impact and some of our projects have received international awards (page 71), that highlight their pioneering and transformative nature. Some of the milestones of the funding program were:
- In April we issued our first-ever benchmark bond, with a 2-year term and a nominal amount of US$1 billion, followed by another US$1 billion bond with a 3-year tenor in July. Both were earmarked for our COVID-19 response plan. The benchmark bonds received strong demand by investors from Europe, the Middle East, Asia, and the Americas.
- In October, we issued our first bond denominated in Australian dollars, another COVID-19 Response Bond with a nominal amount of AUD$140 million (equivalent to US$99 million) and a 15-year tenor, the longest maturity bond issued by IDB Invest to date.
- We strengthened our presence in Latin American capital markets through domestic bond issues: we issued our sixth and largest-ever bond in Mexico with a nominal amount of MXN$2 billion (equivalent to US$96 million), and a 3-year tenor.
- In Paraguay we issued two bonds with a total amount of PYG $125 billion (equivalent to US$18 million). These bonds contribute to the development of the local capital markets, providing local investors with instruments to increase the diversification and credit quality of their investment portfolios.
- We increased our funding in Brazilian reais and Colombian pesos and, for the first time in IDB Invest history, executed a funding transaction in Trinidad and Tobago dollars.
IDB Invest assists clients with advisory services throughout the project life cycle, from preparation to financing and operation. Designed to boost impact, these services focus on climate change, gender equality, diversity and inclusion, sustainability, MSMEs, and Public-Private Partnerships.
During 2020, 85 advisory services were launched and 51 concluded, a 21% increase vis-à-vis 2019. At the end of the year, there were 126 active advisory services.
In light of the pandemic, IDB Invest adapted its advisory services to the new context, shifting from a traditional model based on in-person training to a new one that incorporates automatic diagnostics, online training, practice communities, and digital communications.
Among the advisory services initiated during 2020, these examples stood out:
- Adaptation to climate change. Two major tropical storms hit Central America, underscoring the importance of helping businesses in the region adapt to more extreme conditions. Mercon, a global green coffee distributor, sought IDB Invest’s support for a program to promote climate-smart practices among its smallholder suppliers in Nicaragua. It is also important to note that the IDB Group worked with the World Bank and CABEI to advance a joint action plan to finance humanitarian assistance and reconstruction work in the affected countries.
- Adoption of circular solutions. IDB Invest is consulting for Grupo KUO in Mexico for the adoption of circular solutions in plastics through the inclusion of recyclers in reverse logistics.
- Support for medium-sized companies and the health sector. IDB Invest structured and acquired the first social bond in Brazil, issued by Banco ABC in Brazil. IDB Invest’s contribution will support Banco ABC’s portfolio of medium-sized companies and the sectors in meeting their financing needs and respond to the crisis. IDB Invest supported Banco ABC to confirm the thematic classification on the bonds as social.
In Colombia, in collaboration with the IDB, we supported the National Infrastructure Agency in structuring one of the country’s most strategic transportation projects, the navigability of the Magdalena River.
In Brazil we aided the national telecommunications agency, ANATEL, in defining an optimal structure to ensure the bankability of a project to expand broadband connectivity in the Amazon region.
In Mexico we worked on the first private initiative for a road project, the object of an unsolicited proposal, a model that may be replicated in other countries with suitable regulatory and institutional frameworks.
PPPs: In Jamaica, we provided advice to the Development Bank of Jamaica regarding the possibility of structuring the projects of the Cayman Islands Special Economic Zone under a PPP scheme.
Under an express mandate from its Board of Governors, IDB Invest works to expand its financing for countries that had historically benefitted less from the IDB Group’s non- sovereign guaranteed operations, namely the smaller Latin American economies and the Caribbean nations.
Commitments for Small & Island Countries have grown every year since 2016, reaching US$522 million, which represents 8.5% of total commitments in 2020. The shift has been both in volume and the type of transaction toward larger and more economically significant transactions across different sectors.
IDB Invest remains committed to increasing its operations in S&I countries, aiming to devote at least 10% of its commitments to projects in these nations and making its best efforts to book at least one per year in Barbados, Belize, Guyana and Haiti.
During our first five years of operation, we focused on building a strong backbone as the foundation to support the origination and management of a growing portfolio to ensure sustainable impact and to allow for speed, selectivity, and proactive management of financial and non-financial risks. This vision encompassed prioritizing growth in our project origination capacity as well as in the middle- and back-office areas, while also actively investing in process and systems improvements.
In 2020, we continued to strengthen the backbone in three clearly defined elements: people, process, and systems. The expected outcome is to enhance efficiencies and to support our ability to originate, book, and service an increasingly wide range of transaction types and meet the ambitious growth targets for sustainable impact. We also deepened our capacity and skills in terms of industry and products knowledge, expertise, automation improvements, and new functionalities to continue to optimize the provision of our services to internal and external clients.
IDB Invest’s workforce continues to be gender-balanced (51% female, 49% male), a trend that is increasingly reflecting in the upper echelons of the organization, where women hold 37.8% of leadership positions. Moreover, we have increased our diversity with respect to nationalities represented in the workforce. As of November 1, 2020, we have citizens from all Small & Island countries in LAC, and nationals from countries that were not represented in 2016, such as Bolivia, Dominican Republic, Guatemala, Guyana, Honduras, and Panama. IDB Invest is committed to having a workforce that reflects the diversity of the region and its clients and to creating an inclusive culture that celebrates differences. In this regard, in 2021 the IDB Group will update its diversity and inclusion framework.
At IDB Invest, our job is to give clients the tools they need for sustainable growth. Thus, strengthening our client strategy is at the core of our mandate.
The first version of the Client Portal and other improvements such as the unification of client ID Identifiers across all IT systems are expected to be deployed in 2021. Also, in terms of relationship management, strategic clients were identified, and dedicated relationship managers were assigned to continue developing and nurturing opportunities for business and collaboration with a medium- and long- term horizon. Finally, we implemented a satisfaction survey to better understand client experience after financial closing and during supervision.
During 2020 IDB Invest steadily increased its output of knowledge products aimed at enhancing impact for all investors, sharing lessons learned from its operations, spreading best practices throughout the region, and highlighting first-of-a-kind projects that help the private sector to invest with impact.
External communication efforts also paid off, contributing to IDB Invest branding and image as a partner of choice in LAC. Media mentions increased in leading regional and international outlets. We also promoted the valuable work of clients and partners through more than 30 digital marketing campaigns across our communication channels, expanding our email and reaching over 9 million people.
IDB Invest works with its clients to implement best practices on environmental, social and corporate governance risk management so that private sector enhanced performance contributes to the attainment of the Sustainable Development Goals.
During 2020, we continued to implement measures to strengthen our management of non-financial risks as an added value to our clients. Our focus remains on promoting an integrated view of risk, emphasizing the correlation of credit risks and non-financial risks in all their dimensions, including reputational, integrity, environmental, social, corporate governance, climate, gender, and contextual risks as well as current and emerging operational risks.
An updated Environmental and Social Sustainability Policy, which became effective on December 15, 2020, places IDB Invest at the forefront of sustainable development best practices globally. The Policy and related implementation manual benefited from the active consultation with civil society and regional stakeholders. Significant improvements were introduced in human rights, stakeholder engagement, vulnerable groups, grievance mechanisms, avoidance of reprisals, gender, indigenous peoples, and people with disabilities.
We also developed new methodologies and tools that are being applied to direct investments as part of the environmental and social due diligence process to assess and manage specific risks. A new Access to Information Policy, which came into effect in 2020, reflects IDB Invest’s commitment to transparency in the exercise of its activities.
In 2020 IDB Invest continued to build on initiatives aimed at strengthening the institutional capacity of our clients beyond compliance. These initiatives encompassed the collection and dissemination of lessons learned and best practices. In this context, we held 9 external workshops with clients, and launched 9 publications and sector notes, of which 4 related to COVID-19.
These can be accessed in our website:
- Guidance for Infrastructure Projects on COVID-19: A Rapid Risk Profile and Decision Framework
- Corporate Governance: COVID-19 and the Board of Directors
- Guidance for the Agriculture Sector on COVID-19: Risks and Response Framework
- Health Risk Management and Resilience in Private Sector Projects: IDB Invest Clients’ Response to the COVID-19 Pandemic, Early Lessons and a Road Map for Action Decision Framework
In July 2017, the Financial Conduct Authority, the regulator of LIBOR, announced that it would no longer compel panel banks to submit rates required to calculate LIBOR after December 31, 2021. Therefore, market participants, including IDB Invest and its borrowers, would need to move to alternative reference rates because the availability of LIBOR after this date was not a certainty. On December 4, 2020, the Intercontinental Exchange Benchmark Administration Limited published a consultation on its intention to postpone the discontinuation date for the most liquid U.S. LIBOR tenors from December 31, 2021 to June 30, 2023. Although the transition from LIBOR is faced with numerous uncertainties and challenges, the transition decision is aimed at increased transparency in the financial markets by better aligning the alternative reference rates with actual market transactions.
IDB Invest has completed an initial impact assessment of its exposure to LIBOR and developed an implementation roadmap for the LIBOR transition. IDB Invest is actively working through this transition and is analyzing the impact from multiple perspectives: lending, funding, accounting, operations, information technology, liquidity investing, risk and legal, considering the portfolio of existing loans and other instruments that use LIBOR as a benchmark.
Mauricio J. Claver-Carone Elected President of the Inter-American Development Bank
On September 12, 2020, the Board of Governors of the Inter-American Development Bank elected Mauricio J. Claver-Carone as the new President of the IDB. The Board of Governors, the IDB’s top policy making body, is composed by government authorities from the Bank’s 48 member countries. The President of the IDB, who is appointed to a five-year term, also chairs the Board of Executive Directors of IDB Invest and the Donors Committee of IDB Lab. Mr. Claver-Carone took office on October 1, 2020. Prior to his election, he served as Deputy Assistant to the President of the United States and Senior Director for Western Hemisphere Affairs at the U.S. National Security Council. He previously served as the United States Executive Director at the International Monetary Fund and as Senior Advisor for International Affairs at the U.S. Department of the Treasury.
Mauricio J. Claver-Carone is the IDB’s fifth President. He followed Luis Alberto Moreno (2005-2020), Enrique V. Iglesias (1988-2005), Antonio Ortiz Mena (1971-1988), and Felipe Herrera (1960-1971).
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 LAC and to connect countries and private sector investments with the SDGs.
OUR MEMBER COUNTRIESopen/close
Argentina, Austria, Bahamas, Barbados, Belgium, Belize, Bolivia, Brazil, Canada, Chile, China, Colombia, Costa Rica, Croatia, Denmark, Dominican Republic, Ecuador, El Salvador, Finland, France, Germany, Guatemala, Guyana, Haiti, Honduras, Israel, Italy, Jamaica, Japan, Korea, Mexico, Netherlands, Nicaragua, Norway, Panama, Paraguay, Peru, Portugal, Slovenia, Spain, Suriname, Sweden, Switzerland, Trinidad and Tobago, United States of America, Uruguay, and Venezuela.
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 operations with state-owned companies that do not have a sovereign guarantee).
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. Among the powers of the Board of Governors that cannot be delegated to the Board of Executive Directors are the admission of new member countries, the engagement of external auditors, the approval of IDB Invest’s financial statements, and the amendment of the Agreement Establishing the Inter-American Investment Corporation.
BOARD OF EXECUTIVE DIRECTORSopen/close
The Board of Executive Directors is responsible for the conduct of 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 Board of Executive Directors establishes the basic organizational structure of IDB Invest and adopts the budget of the institution.
The 13 executive directors and their alternate executive directors serve three-year terms and represent one or more of its member countries. The Executive Committee of the Board of Executive Directors is composed of one person who is the director or alternate appointed by the member country having the largest number of shares in IDB Invest, two persons among the directors representing the regional developing member countries, and one person from the directors representing the other member countries. All IDB Invest loans and investments are subject to the consideration of this Committee.
The President of the IDB is ex officio Chair of the Board of Executive Directors of IDB Invest. The Chair presides over meetings of the Board of Executive Directors but does not have the right to vote except in the case of a tie. The Chair may participate in meetings of the Board of Governors but does not have voting rights.
The General Manager and CEO of IDB Invest is appointed by the Board of Executive Directors by a four-fifths majority of the total voting power on the recommendation of the Chair of the Board of Executive Directors. Under the direction of the Board of Executive Directors and the general supervision of its Chair, the CEO handles the day-to-day business of IDB Invest. In consultation with the Board of Executive Directors and its Chair, the CEO is responsible for the organization, appointment, and dismissal of IDB Invest officers and staff. The CEO, who may participate in meetings of the Board of Executive Directors, establishes IDB Invest’s operational structure and may modify it to keep pace with the organization’s changing needs.
To fulfill its development mission, IDB Invest has 478 employees distributed in five departments. Of the total, 30% of employees are located in 24 of the 26 offices in LAC: 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.
The 2020 Annual Report of the Inter-American Investment Corporation, hereinafter referred to as “IDB Invest”, provides the corporate and operational results of the year.
IDB Invest is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean (LAC) through the private sector. We manage a portfolio of US$16.1 billion of development-related assets, involving more than 400 clients. We work in partnership with companies across strategic sectors in LAC, providing them access to financial resources, as well as to our technical knowledge and sector expertise. We champion sustainable companies and projects to achieve better financial results and maximize economic, social and environmental development in LAC.
The operational data presented in this document is based on the combined non-sovereign guaranteed portfolio of the Inter-American Development Bank (IDB) and IDB Invest, referred to together as IDB Group for the purposes of this Annual Report. The financial highlights, financial results, and financial statements in appendix 1 refer to IDB Invest only.
Small and Island Countries: The Bahamas, Barbados, Belize, the Dominican Republic, Guyana, Haiti, Jamaica, Suriname, and Trinidad and Tobago.
Trade Finance Facilitation Program (TFFP): launched in 2015, the TFFP is an effective solution created to support access by the region’s banks to international trade finance markets through technical cooperation, knowledge creation, and financial products. Under the TFFP, the IDB and IDB Invest provide short-term loans to local banks to finance portfolios of eligible trade transactions and credit guarantees to global banks to mitigate any risk associated with trading instruments issued by banks in Latin America and the Caribbean.
Unfunded Credit Protection: Under the UCP program, IDB Invest enters into an agreement with international insurance companies having a Single A rating and above, whereby the insurers cover the risk of non-payment of principal under the loan agreement.
VERSION FROM MARCH, 2021