When we talk about capital and balance sheet management at IDB Invest, it can quickly become a technical conversation. But for me, the idea behind it is actually quite simple: how do we make every dollar entrusted to us deliver greater development impact in Latin America and the Caribbean?

Capital is a precious resource. Our shareholder countries provide it because they expect us to turn it into investments and opportunities that deliver impact across the region. That responsibility becomes even more important at a time of significant development needs and constrained public resources. That is why we are continuing to evolve how we manage our balance sheet.

A Model that Supports More Investment and Private Capital Mobilization

At IDB Invest, our Originate-to-Share business model is changing the way we think about financing. Rather than simply originating investments and holding them on our balance sheet, we can increasingly bring other investors alongside us, share assets and risks, and preserve and recycle balance-sheet capacity to support new investments.

This is also where Originate-to-Share connects directly with how we manage our capital and balance sheet. By using our capital more efficiently, we can support more investment and mobilize more private capital toward the development priorities of our region.

Originate-to-Share is at the center of our evolving business model. Active management of our capital and balance sheet complements and strengthens that model, helping us realize its full potential.

In practice, this means bringing together different tools that preserve, recycle, and expand our capacity in different ways. Asset sales allow us to redeploy capital. Risk-transfer solutions, including insurance, guarantees, and significant risk transfers, can free up capacity and help manage portfolio concentrations. Hybrid capital can strengthen our own-account capacity and, in turn, reinforce our ability to originate new investments and mobilize private capital. Together, these tools give us greater flexibility in how we manage and deploy our capital.

This approach is closely aligned with the direction established by the G20 Capital Adequacy Framework review, which encouraged multilateral development banks to make better and more innovative use of their balance sheets.

IDB Invest already has a strong track record in this area. We actively use tools such as credit insurance, synthetic securitization, and asset sales as part of our capital optimization approach. Building on the capital increase and our Originate-to-Share model, we are advancing toward an even more dynamic and integrated approach to capital management.

We are now expanding portfolio-based risk-transfer solutions and evaluating the strategic use of hybrid capital. Our goal is to bring these tools together in a disciplined approach that gives us greater flexibility to recycle and deploy capital efficiently, support growth and private capital mobilization, and maintain strong credit fundamentals.

Ultimately, this is not about the balance sheet itself. It is about what the balance sheet makes possible.

Every time we create additional capacity, mobilize another investor, or put capital back to work, we create another opportunity to finance a company, support infrastructure, strengthen a community, and help the region grow.

And that is the real objective: not simply to optimize capital, but to multiply its impact. Because ultimately, this is about people. It is about maximizing development impact, creating opportunities, and improving lives across Latin America and the Caribbean.

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