IDB increases lending capacity to support development in LAC

MANILA, (CMC) – The Inter-American Development Bank Group (IDB Group) says it has increased its additional lending capacity to US$138 billion over the next decade to support development in Latin America and the Caribbean (LAC), reflecting the impact of institutional reforms and financial innovation. It said that additional lending headroom has increased by 68 per cent this year, from $US82 billion to US$138 billion over the next 10 years, exceeding initial projections. The increase is driven by capital-adequacy reforms, exposure-exchange agreements, and revised credit-rating agency criteria. The IDB Group’s $138 billion additional space accounts for nearly 20 per cent of the US$792 billion in additional lending capacity collectively reported by the heads of multilateral development banks (MDBs). The IDB Group is on track to reach its ambition of providing $500 billion in financing over the next decade. “The increase in lending capacity demonstrates how capital-adequacy measures, innovation, and prudent risk management can help multilateral development banks expand their scale and impact while maintaining financial strength,” said IDB Group President Ilan Goldfajn. At the IDB, the public-sector arm of the IDB Group, additional lending headroom increased as a result of financial innovations as well as revised credit-rating agency criteria for the institution’ s financial strength.