The Japan International Cooperation Agency (JICA) held a signing ceremony with the Inter-American Development Bank (IDB) and the Inter-American Investment Corporation (IDB Invest) on February 18 in Yokohama for the “Private Sector Development Trust Fund” for Latin America and the Caribbean.
Although the average income level in Latin America and the Caribbean is relatively high among developing regions, various social issues such as income, regional, and gender disparities and vulnerability to climate change persist. Of the 169 goals of the Sustainable Development Goals (SDGs), only 30 goals in the Latin America and Caribbean region have been assessed as achievable by 2030, and the financing gap to achieve the SDGs is estimated at US$650 billion annually. As public spending is not expected to increase due to the fiscal difficulties in many countries, closing the financing gap through private investment has become an important issue.
Under these circumstances, this project will invest up to US$1.5 billion in the Trust Fund Achieving Development of Latin America and the Caribbean (TADAC), a trust fund established within the IDB, the largest development finance institution in the Latin America and Caribbean region, and managed by IDB Invest, the private investment and lending arm of the IDB Group. TADAC will provide co-financing in line with IDB Invest’s financing of private companies’ efforts to achieve the SDGs. JICA will use its overseas investments and loans to contribute to the sustainable socio-economic development of Latin America and the Caribbean by reducing the financing gap needed to achieve the SDGs in the region.
The signing ceremony was attended by IDB President Iran Goldfein, IDB Invest CEO James Scriven, and JICA President Akihiko Tanaka, who took this opportunity to exchange views on further cooperation and collaboration to resolve issues in the region.
Investment agreement signing ceremony (from left to right: IDB Invest CEO Scriven, IDB President Goldfein, JICA President Tanaka) JICA Yokohama Tour of the Overseas Migration Museum (from left to right: IDB Vice President Schwartz, IDB Lab CEO Hoffman, IDB President Goldfein, JICA President Tanaka of JICA, CEO Scriven of IDB Invest, and JICA Director Imoto)
Project Summary
- investee
Trust Fund Achieving Development of Latin America and the Caribbean
- country (region covered)
Latin America and the Caribbean
- amount of capital contribution
Up to US$1.5 billion (US$1 billion initially, with an option to increase by US$500 million)
- project name
Private Sector Development Trust Fund
- business purpose
This project aims to support private sector projects in Latin America and the Caribbean through investments in the Trust Fund to be established at the IDB, thereby reducing the financing gap necessary to achieve the SDGs in the region and thereby contributing to sustainable socioeconomic development in the region.
- business overview
Provide the necessary funds for IDB Invest’s lending to private companies in Latin America and the Caribbean through an equity investment in a trust fund to be established at the IDB.
- contributions to the SDGs (main ones)
Goal 17: Achieve goals through partnerships.
© Source JICA
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