Inter-American Development Bank Creates New Institution for Private Sector Operations
Friday, March 27, 2015
The Inter-American Development Bank is in the process of forming a new entity to handle its private sector activities, according to a bank employee with knowledge of the plans.
Bank officials are discussing details around the new institution — which does not yet have an official name but is being referred to internally as New Corp. or IIC+ — this week at the annual meeting of the board of governors in Busan, South Korea, which ends Sunday.
It would be the latest in a series of moves by multilateral and bilateral aid agencies over the past few years to create new financing instruments and tap into corporate investments in the developing world which far outnumber official development assistance.
IDB has increasingly focused on private sector engagement as ODA to the region has steadily decreased and as Latin America has risen to middle-income status with healthy private sector competition.
With the new move, all private sector operations will be “merged out” and joined under the Inter-American Investment Corp., a member of IDB that promotes private sector development in the region.
The new entity would require new funding but would be a compilation of the bank’s four existing private sector windows — IIC, the Structured and Corporate Financing Department, Office of the Multilateral Investment Fund and Opportunities for the Majority Sector — according to the employee, who wished to remain anonymous since the bank’s press office did not respond for comment on the new venture.