The Multilateral Investment Guarantee Agency of the World Bank (MIGA) and IDB Invest, the private sector arm of the Inter-American Development Bank Group, have entered into a four-year partnership that is set to mobilize more private sector capital in Latin America and the Caribbean.
Under the terms of the agreement, MIGA, the political risk insurance agency of the World Bank, and IDB Invest have agreed to combine and deploy risk-shifting and financing solutions across the region.
According to the announcement, the agreement calls for regular engagement between the two companies to develop a shared pipeline of projects.
Ultimately, this will wind up expanding the number of bankable projects, as well as broaden the relationship between the two firms and potential private sector investors.
At the same time, the collaboration is expected to significantly impact the region’s development, recognizing the important role of the private sector in driving economic growth and reducing poverty.
It is worth highlighting that this partnership is taking place during a period where the world is facing interconnected challenges to development and recognizes the crucial role of the private sector.
The collaborative efforts between both MIGA and IDB Invest aim to identify barriers to private sector investment, as well as promote activities that lead to innovation of new and scalable projects and products, while also mitigating risk for investors.
Hiroshi Matano, Executive Vice President of MIGA, said: “Amid multiple crises on the global front, MIGA’s role is to encourage private sector investors and provide increased stability by helping in managing and mitigating country risks. Collaborating with our partners will be crucial in crafting solutions to the challenges of our time, unlocking new opportunities, and ultimately mobilizing the much-needed private sector investment to meet our development goals.”
James P. Scriven, CEO of IDB Invest, added: “We are committed to expanding our impact in the region. We are evolving our business model and increasing capital, we aim to attract new investments and enhance development impact across Latin America and the Caribbean. The partnership with MIGA will enable us to access markets and initiatives that were previously considered too risky but are urgently needed now.”
Ethiopis Tafara, Vice President, Chief Risk, Legal & Sustainability Officer and Partnerships at MIGA, commented: “In pursuing this collaboration, MIGA and IDB Invest will focus on innovation and projects across all sectors with a special emphasis on protecting the planet and promoting inclusion, particularly with respect to gender, youth, and vulnerable communities. The combined efforts are what we need to grow the pie of development projects, support a sustained recovery, and build for the future.”