(Bloomberg) -- Inter-American Investment Corp. is bolstering its ability to mobilize capital from investors as it seeks support from its shareholders for a proposed capital increase.
IDB Invest, the private-sector arm of the Inter-American Development Bank Group, is luring this year about $2 of investor capital for each dollar of financing out of its own balance sheet, Chief Executive Officer James Scriven said in an interview. That’s versus a ratio of $0.6 of investors cash per each dollar that the Washington-based lender previously had, he said.
Multilateral development lenders including the Inter-American Development Bank Group are currently implementing or considering measures to boost their financing capacity by about $200 billion over the next decade, according to a G20 document released in July. In March 2024, IDB Invest shareholders, including the United States and China, are slated to discuss a capital increase proposal that would advance an expansion plan.
“We’ve been quite public about our intentions to grow our activity,” Scriven said in an interview from the COP28 climate conference in Dubai. “If we get approval from our shareholders in March next year, it’s when our expansion plans initiate.”
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Among the projects that helped bolster the lender’s ratio of investors’ capital mobilization, IDB Invest arranged a $368 million debt financing to AES Dominicana Renewable Energy S.A.. The transaction consisted in $37 million portion from IDB Invest and the rest from 21 financial institutions. Also, telecom operator Liberty Costa Rica got a $450 million debt financing, including a $50 million loan from IDB Invest and a $400 million sustainability-linked bond sold to institutional investors.
“Originate-to-share is a concept where we change our business model to become less of an investor and more of a catalyzer to crowd in the private, international and domestic capital markets into development assets for Latin American and Caribbean,” Scriven said.
To rally capital around sustainable goals in the region, IDB Invest and the World Bank Group’s International Finance Corp. are teaming up with another 22 financial institutions, including Banco BTG Pactual S.A. or Banco Santander SA’s unit in Brazil. The effort is part of the Amazon Finance Network, an initiative looking to boost investment flows to the region in pursuit of net-zero deforestation and improve the standard of living for local communities .
“This is a network where we share experiences and financing,” Scriven said. With more than 22 million people living in the Amazon basin, he added that “it’s extremely important that we find a way to help them access a better life (while) making the Amazon more sustainable.”
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