IADB, China Exim Bank to establish Latin American investment fund

The two institutions signed an agreement at the annual meeting of the Inter-American Development Bank this week to establish a public-private investment fund and a new infrastructure facility to back Latin American projects.

The Inter-American Development Bank and the Export-Import Bank of China have agreed to establish an investment fund for infrastructure, energy and natural resources projects in Latin America and the Caribbean. 

The fund aims to invest in “key sectors of interest to both regions,” according to a statement from the Inter-American Development Bank (IADB). It will also invest in small and medium-sized businesses “active in the distribution chain” of the energy, infrastructure and natural resource industries.

The banks did not disclose how much they had committed to the fund, which they agreed to form at the IADB’s annual meeting last weekend in Calgary, Canada.  

The two banks also agreed to establish an “infrastructure facility” to support both public and private infrastructure projects in the IADB’s 26 borrowing member countries, which include Brazil, Chile, Argentina and Ecuador, among others.

In related news, the IADB also announced at the meeting that leaders from Canada, the US and Mexico had agreed to commit $13 million toward a $20 million cross-border infrastructure fund. The IADB will manage the fund, which aims to increase trade by reducing the costs of intra-regional transport and logistics within Latin America, according to a statement.

The moves reflect the IADB's growing ambitions for spurring private sector growth in Latin America and the Caribbean. The IADB expects to double the amount of loans and grants it provides to private companies in Latin America over the next four years, and hopes to provide over $3 billion to its borrowing member countries by 2015, according to the statement.