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.
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.
IDB Invest COVID-19 Response
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.
El plan de respuesta de BID Invest se basó en seis elementos fundamentales:
1. Enfocarse en los efectos de la crisis.
2. Actuar con mayor rapidez para abordar sus consecuencias más urgentes.
3. Hacer más de lo que se planeó originalmente.
4. Encontrar los socios adecuados para amplificar las intervenciones.
5. Garantizar una respuesta financieramente sostenible.
6. Adaptarse a lo que implica operativamente dar una respuesta oportuna a la crisis.
Incorporamos un lente COVID-19 en nuestro Marco de Gestión de Impacto para evaluar todos los proyectos tras la aprobación de la Respuesta COVID-19 del Directorio Ejecutivo de BID Invest. Este lente clasifica las potenciales transacciones en dos categorías: aquellas que protegen y alivian apuntando los efectos inmediatos de la crisis; y los que reavivarán la recuperación de las economías apuntando a los efectos de la crisis a medio y largo plazo.
Dada la velocidad con la que se desarrolló la crisis y el daño potencialmente duradero de la contracción económica, era crucial prestar ayuda rápidamente. Para acelerar el despliegue de recursos incluso mientras nos adaptábamos al trabajo a distancia, adoptamos una serie de medidas flexibles temporales para agilizar los procesos de aprobación.
Una de estas medidas fue la creación de una facilidad de gestión de crisis de US$500 millones que cubriera las necesidades urgentes de liquidez de los clientes existentes. Otra fue la ampliación del límite de exposición del Programa de Facilitación de la Financiación del Comercio Exterior (TFFP, por su sigla inglesa) de US$1.500 millones a US$3.000 millones.
Al principio de la pandemia, los gobiernos de ALC empezaron a tomar una serie de medidas para reducir la propagación del virus, como los confinamientos, toques de queda, cierres de escuelas y negocios, restricciones a los viajes o simplemente instar a la gente a quedarse en casa o a mantener el distanciamiento social. Inicialmente resultó difícil calibrar el impacto de estas medidas. Para ayudar a orientar respuestas más eficaces a la crisis, era esencial que los países dispusieran de información oportuna y precisa sobre los efectos de la pandemia en la región.
En marzo, en un lapso de diez dias, como evidencia del valor de las sinergias del Grupo BID, juntos lanzamos el tablero de impacto del coronavirus, un instrumento diseñado para medir en tiempo real los efectos de las restricciones relacionadas con el virus como un indicador de la actividad económica. Gracias a una alianza con Waze, la aplicación de tráfico por GPS, creamos rápidamente un índice que muestra cuándo y dónde cambian los patrones de tráfico en tiempo real. La amplia cobertura de los datos nos permitió informar sobre los cambios diarios y semanales de tráfico en 23 países y 67 áreas metropolitanas. Empezamos a observar los datos de Waze incluso antes de la que la Organización Mundial de la Salud declarara la pandemia el 11 de marzo. Detectamos cambios significativos en la congestión, que podrían ser tomados en cuenta por tomadores de decisiones en toda la región.
Además, el tablero informa diariamente de casos y muertes por COVID-19; muestra los cambios en la calidad del aire de 11 ciudades, y hace un seguimiento de los patrones de movilidad humana basados en los teléfonos celulares y el uso del transporte público informado por Moovit. A la fecha, el tablero ha recibido más de 60.000 visitas de todo el mundo. En el último año, los principales países que utilizaron estos datos fueron Colombia, Estados Unidos, Brasil, Perú, México, Argentina y Costa Rica. El tablero también se ha difundido en medios de comunicación regionales e internacionales.
1. Infraestructura - AES (El Salvador):
Facilidad de compra de cuentas a cobrar por US$60 millones para financiar los aplazamientos de pago de facturas de electricidad en El Salvador. Las empresas de servicios públicos se vieron afectadas por la suspensión y el aplazamiento del pago de facturas durante tres meses por parte de clientes afectados por la pandemia. La electricidad consumida durante esos meses deberá pagarse en cuotas mensuales a lo largo de dos años. La facilidad de pago estructurada por BID Invest atenderá las necesidades de financiación del sector eléctrico salvadoreño ocasionadas por las medidas de emergencia, lo que permitirá amortiguar su impacto económico.
2.Empresas - Phoenix Tower International (Ecuador):
Un préstamo de US$80 millones y un préstamo B por US$12 millones para ayudar a consolidar un modelo de negocio basado en el uso compartido de torres de telecomunicaciones en el mercado ecuatoriano. El proyecto ayudará a aumentar la cobertura de banda ancha móvil por parte de distintos operadores de redes celulares. Este resultado es especialmente pertinente en el contexto de la crisis del COVID-19, ya que las redes han experimentado un aumento significativo del consumo de datos digitales y los usuarios demandan sistemas fiables dadas las medidas de distanciamiento social (teletrabajo, telemedicina, clases en línea, etcétera).
3. Instituciones Financieras - Caja Los Héroes (Chile):
Un préstamo de US$50 millones para ayudar a esta caja de compensación de beneficios sociales a profundizar y ampliar su programa de inclusión financiera y transformación digital, centrándose en las personas mayores, uno de los grupos más afectados por el COVID-19. El programa también se dirige a la población no bancarizada, incluidos los individuos de bajos ingresos y los inmigrantes. Dentro del programa, la plataforma ofrecerá acceso a tarjetas de débito y cuentas virtuales, al igual que recursos de educación financiera. BID Invest también ofrecerá incentivos a empresas afiliadas a Caja Los Héroes para que se unan a un grupo de trabajo de paridad de género.
Strategic Sectors
INFRASTRUCTURE
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:
Un paquete de US$67,2 millones, que combina préstamos de BID Invest y bancos comerciales, además de recursos concesionales del Fondo de Tecnología Limpia y de un fondo climático canadiense, apoyará la construcción de cuatro plantas fotovoltaicas con una capacidad combinada de 187 MW en el estado brasileño de Bahía.
La financiación mixta permitirá al cliente, Atlas Renewable Energy, adoptar paneles solares bifaciales más eficientes y llevar a cabo un plan de acción de diversidad para emplear a más mujeres y afrodescendientes en el proyecto.
Un préstamo de US$25 millones ayudará a financiar la construcción de escuelas, parques tecnológicos y centros deportivos en 16 de los 19 departamentos de Uruguay, en el marco de una asociación público- privada entre la Administración Nacional de Educación Pública y un consorcio de empresas locales de construcción e ingeniería. El proyecto ampliará el acceso a la educación y la formación que demanda el mercado laboral fuera de las grandes zonas urbanas.
Un paquete de financiación en reales por el equivalente a US$179 millones ayudará a SABESP, la mayor empresa de agua y saneamiento de América Latina, a ampliar el tratamiento de aguas residuales que contaminan un río que atraviesa parte de la ciudad de São Paulo. La empresa agregará capacidad propia de generación de energía solar para alimentar plantas de tratamiento de agua, reduciendo su huella de carbono.
FINANCIAL INSTITUTIONS
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).
BID Invest intensificó su programa de facilitación de la financiación del comercio exterior mediante el establecimiento de 27 líneas de crédito nuevas o renovadas por un total de más de US$1.000 millones y el aumento de más de 30 líneas existentes en más de US$500 millones. De esta forma, las operaciones del TFFP aumentaron 57 % frente a 2019.
Alivio de liquidez para microfinancieras afectadas por la pandemia. Un préstamo de US$60 millones a un año ayudará a Bancoldex, el Banco Nacional de Desarrollo de Colombia, a ampliar las líneas de crédito de emergencia para entidades microfinancieras que operan en zonas rurales, donde los clientes de bajos ingresos casi no tienen o efectivamente no tienen acceso a bancos comerciales.
Un préstamo de hasta US$16 millones a Demerara Distillers, uno de los principales grupos económicos de Guyana, para financiar la instalación de nuevas líneas de procesamiento y envasado de sus jugos naturales y productos lácteos vendidos en el mercado nacional.
Lanzamiento del fondo First Venture Debt en la región, en asociación con Silicon Valley Bank y Partners for Growth. Esta destacada operación en términos de impacto y sinergias con el Grupo BID consiste en un fondo de $ 30 millones con un período de inversión de cuatro años y una vida de ocho años, para apoyar empresas jóvenes y de alto crecimiento en ALC, en sectores como software y tecnología.
CORPORATES
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:
Un paquete de financiación de US$1.100 millones liderado por BID Invest y la CFI del Banco Mundial apoyará un proyecto para construir una fábrica de última generación en Minas Gerais, Brasil, para producir pasta celulósica disolvente, que se utiliza para fabricar fibras textiles biodegradables. La fábrica tendrá su propia planta de generación de bioelectricidad, que también alimentará la red pública.
Un préstamo en moneda local por el equivalente a US$40 millones ayudará al promotor inmobiliario peruano Los Portales a llevar a cabo hasta 19 proyectos en ocho ciudades, con el objetivo de proporcionar viviendas asequibles a unos 12.000 compradores primerizos de bajos ingresos.
Selina, una cadena de hoteles que gestiona propiedades en 12 países de ALC, utilizará una línea de crédito intermedia (mezzanine) de US$50 millones para mejorar su liquidez durante la pandemia y ampliar sus operaciones en la región a medida que se recupere el sector turismo. El acuerdo incluye la movilización de US$15 millones de Blue Like an Orange Sustainable Capital, un socio financiero de BID Invest.
En alianza con una de las principales asociaciones empresariales, el Consejo Mexicano de Negocios, BID Invest está concediendo préstamos a grandes empresas mexicanas para establecer programas de factoraje inverso con el fin de proporcionar liquidez a las PYME en sus cadenas de suministro que fueron afectadas por la pandemia.
Con esta iniciativa, BID Invest espera financiar entre 15 y 20 mil MIPYME. Entre los participantes se encuentran la autopartista Rassini Automotriz, el conglomerado industrial Grupo Kuo, el procesador Sigma Alimentos y la empresa constructora 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.
Financial Solutions
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$67.5 million subordinated B-loan.
We also continued our efforts to expand our investor base, which comprises more than 400 partners all over the world, having historically closed at least one transaction with over half of those investors. Looking ahead, IDB Invest will continue developing innovative instruments to attract more institutional investors and pension funds to the region.
BLENDED FINANCE
With over US$ 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.
INSTITUTIONAL FUNDING
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.
Non-Financial Solutions
ADVISORY SERVICES
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.
PUBLIC-PRIVATE PARTNERSHIPS
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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.
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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.
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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.
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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.
Small & Island Countries
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.
Pushing Diversity
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.
Client Strategy
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.
Knowledge and Communication
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.
Managing Non-Financial Risks
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
Replacement of Libor
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.
Institutional Governance
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).
BID Invest promueve el desarrollo económico de sus países miembros de América Latina y el Caribe fomentando el establecimiento, la expansión y la modernización de las empresas privadas, complementando las actividades del BID.
BID Invest aspira a ser la principal institución financiera con los conocimientos y la pericia necesarios para generar inversiones con impacto en ALC y vincular a los países y las inversiones del sector privado con los Objetivos de Desarrollo Sostenible.
Alemania, Argentina, Austria, Bahamas, Barbados, Bélgica, Belice, Bolivia, Brasil, Canadá, Chile, China, Colombia, Costa Rica, Croacia, Dinamarca, Ecuador, El Salvador, Finlandia, Francia, Guatemala, Guyana, Haití, Honduras, República Dominicana, Israel, Italia, Jamaica, Japón, Corea, México, Países Bajos, Nicaragua, Noruega, Panamá, Paraguay, Perú, Portugal, Eslovenia, España, Surinam, Suecia, Suiza, Trinidad y Tobago, Estados Unidos de América, Uruguay y Venezuela.
Guiado por los principios de fortalecer la eficacia del desarrollo, BID Invest contribuye al desarrollo y la maximización del uso eficiente de recursos y sinergias entre las actividades de los sectores público y privado del Grupo BID. BID Invest se encarga de todas las operaciones sin garantía soberana del Grupo BID (incluyendo las operaciones sin garantía soberana con empresas estatales).
Todos los poderes de BID Invest están conferidos a su Asamblea de Gobernadores, compuesta por un gobernador y un gobernador suplente por cada país miembro, quienes son designados por su respectivo país. Entre las facultades de la Asamblea de Gobernadores que no pueden delegarse en el Directorio Ejecutivo figuran la admisión de nuevos países miembros, la contratación de auditores externos, la aprobación de los estados financieros de BID Invest y la modificación del Convenio Constitutivo de la Corporación Interamericana de Inversiones.
El Directorio Ejecutivo es responsable de conducir las operaciones de BID Invest y ejerce todas las facultades que le son otorgadas en virtud del Convenio Constitutivo de la Corporación Interamericana de Inversiones o que le son delegadas por la Asamblea de Gobernadores. El Directorio Ejecutivo establece la estructura organizativa básica de BID Invest y adopta el presupuesto de la institución.
Los 13 directores ejecutivos y sus suplentes ejercen un mandato de tres años y representan a uno o varios de sus países miembros. El Comité Ejecutivo del Directorio Ejecutivo está compuesto por un director o director suplente designado por el país miembro con el mayor número de acciones en BID Invest, dos directores que representan a los países miembros regionales en desarrollo, y un director que representa a los demás países miembros. Todos los préstamos e inversiones de BID Invest están sujetos a la evaluación por este comité.
El presidente del BID preside ex officio el Directorio Ejecutivo de BID Invest. El presidente conduce las reuniones del Directorio Ejecutivo pero no tiene derecho a voto, salvo en caso de empate. El presidente puede participar en las reuniones de la Asamblea de Gobernadores pero no tiene derecho a voto.
El gerente general de BID Invest es nombrado por el Directorio Ejecutivo por una mayoría de cuatro quintos del total de los votos, siguiendo la recomendación del presidente del Directorio Ejecutivo.
El gerente general se encarga de las actividades cotidianas de BID Invest, bajo la dirección del Directorio Ejecutivo y la supervisión general de su presidente.
Tras consultar la opinión del Directorio Ejecutivo y su presidente, el gerente general es responsable de la organización, el nombramiento y la destitución de los ejecutivos y el personal de BID Invest.
El gerente general puede participar en las reuniones del Directorio Ejecutivo, establece la estructura operativa de BID Invest y puede modificarla para que se adapte a las necesidades cambiantes de la organización.
Para poder cumplir con su misión de desarrollo, BID Invest cuenta con 478 empleados que se reparten en cinco departamentos. De este total, 30 % de los empleados se encuentran en 24 de las 26 oficinas de ALC: Argentina, Bahamas, Barbados, Belice, Brasil, Bolivia, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Guyana, Honduras, Haití, Jamaica, México, Panamá, Paraguay, Perú, República Dominicana, Surinam, Trinidad y Tobago y Uruguay. El resto del personal se encuentra en la sede de BID Invest en Washington D.C.
ANNEX I
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ANNEX II
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ANNEX III
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Final Notes & Glossary
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.
GLOSSARY
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