The Inter-American Development Bank in 2006 was again the primary source of multilateral lending for Latin America and the Caribbean, maintained its financial soundness and launched numerous initiatives to better meet the demand for economic and social progress in the region.
In reporting to the Board of Executive Directors on performance during the year, President Luis Alberto Moreno said the IDB approved 112 projects for close to $6.4 billion and made almost $6.5 billion in disbursements, an 18 percent increase over 2005. (Soundbite President Luis Alberto Moreno - Spanish)
It was a good year for the region, which grew in democracy and made significant progress reducing extreme poverty, as well as for the IDB, which undertook a major overhaul, Moreno said.
Approvals for the year included 76 loans for public-sector investment projects totaling close to $3.6 billion, 17 policy-based loans for close to $1.8 billion and 19 operations without sovereign guarantees for $904 million. The latter category of loans and credit guarantees was made possible thanks to new policies that raised the cap for such operations and expanded them to more sectors.
The Inter-American Investment Corporation also had a good year, approving 46 operations in 13 countries for a total amount of $338 million, in addition to $173 million from other sources. The Corporation also approved its first loan denominated in local currency.
The IDB-administered Multilateral Investment Fund (MIF) approved a total of 135 operations totaling almost $127 million, a 12 percent increased over approvals in 2005. Five countries—France, Haiti, Sweden, Switzerland and the United Kingdom—agreed to participate in the MIF replenishment, bringing to 38 the number of member countries.
New initiatives
During the year, the IDB conducted an in-depth review of its products and windows and updated them so as to better serve its clients. Some of the highlights were:
- The launching of Opportunities for the Majority, an initiative designed to expand access for the vast majority of the population in Latin America and the Caribbean to services that can help them accumulate assets and improve their living standards. (Soundbite President Luis Alberto Moreno - Spanish)
- The Local Currency Facility and the expansion of lending without sovereign guarantees to both the private sector and subnational entities.
- Partnerships with the private sector to respond to client demand with more specialized products.
- New funds: InfraFund for infrastructure projects and the Disaster Prevention Fund, which finance the development and preparation of future operations.
- The Sustainable Energy and Climate Change Initiative, designed to scale up IDB investments in projects to reduce the region’s dependence on hydrocarbons and promote energy efficiency.
- The realignment, a new organizational structure to increase the IDB Group’s responsiveness, bringing it closer to the countries and giving it a more results-oriented focus.
Challenges for 2007
According to Moreno, the main challenge for the Bank in 2007 will be to enhance its response capacity, for which implementation of the realignment process will be critical. “We cannot continue with business as usual,” he stressed. (Soundbite President Luis Alberto Moreno - Spanish)
Moreno highlighted the need to increase IDB effectiveness by strengthening its operations program and deepening its presence in its markets. He added that the Bank must enhance its relevance by strengthening its expertise in such areas as education, health, water and sanitation, and biofuels.
The IDB also needs to bring certain ongoing projects to completion, such as debt relief and the use of concessional resources, as well as to examine the possibility of opening up Bank membership to other countries, beyond the current 47 members.
“The issue today,” Moreno said, “is to better organize the Bank’s knowledge, which is precisely how we will be able make a difference in the long term and thus remain relevant.”