At a glance
In much of Latin America and the Caribbean, deficient transportation infrastructure is reducing productivity and widening the competitiveness gap.
Poor road maintenance, crumbling bridges, overcrowded airports, polluting buses and unreliable train systems are just a few examples of roadblocks to prosperity and progress. Fiscal constraints faced by governments imply that the private sector will play an ever-greater role in building, managing, maintaining and operating the transportation systems that help keep the economy on the move and enable growth.
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Strategy
IDB Invest has a long track record in the transportation sector, with a current portfolio of more than $2 billion.
We finance new construction as well as projects to expand or improve existing infrastructure. We also support the modernization of public transportation equipment and services.
Given the nature of major transportation projects, our clients include not only private companies but state-owned enterprises that require non-sovereign financing.
As part of the IDB Group, we can tap into the Inter-American Development Bank’s unparalleled technical expertise, relationship with the public sector and knowledge of regulatory frameworks and long-term infrastructure needs. In addition to providing financing, we help ensure that the transportation projects we support are sustainable and have a positive impact on development.
Upgrading
Transportation
The projects we finance are typically implemented through public-private partnerships (PPPs), in which private companies take on the up-front costs and share in the risks, management responsibility and eventual rewards.
Before a project gets off the ground, the IDB Group can offer coordinated support to ensure that all the essential components are in place for an effective PPP, including a solid regulatory framework, sound financial structure and transparent bidding process.
As a multilateral development bank, we have a responsibility to look not only at the financial viability of each project but at its long-term social and economic impacts.
Gender equality is one of our considerations from both the demand and the supply side of a project. For example, if we are financing a new city bus system, we make sure the safety of women riders has been considered in the design. And since transportation is such as a male-dominated sector, we may offer financial incentives for incorporating women workers on the jobsite.
Climate change is another cross-cutting concern for IDB Invest. Transportation accounts for a sizable percentage of greenhouse gas emissions, and countries are actively searching for cleaner alternatives to meet their commitments under the Paris Agreement. Public transit projects provide a good opportunity to reduce emissions and make the transportation system more sustainable.
Corporate governance is another area where IDB Invest can add value. We help state-owned enterprises strengthen their internal controls and improve accountability to increase their ability to attract private investment in transportation projects.
Meet the Expert
