World Bank and IDB Invest partner on risk-shifting
The Multilateral Investment Guarantee Agency of the World Bank (MIGA) and IDB Invest, the private sector arm of the Inter-American Development Bank Group, announced a historic four-year partnership this month to mobilise more private sector capital in Latin America and the Caribbean.
MIGA, the political risk insurance agency of the World Bank, and IDB Invest have agreed to combine and deploy risk-shifting and financing solutions in the region.
The cooperation agreement calls for regular engagement between the two institutions to develop a shared pipeline of projects. This will expand the number of bankable projects and deepen the relationship between the two institutions and potential private sector investors.
The collaboration is expected to significantly impact the region’s development, recognising the crucial role of the private sector in driving economic growth and reducing poverty.
“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,” said Hiroshi Matano, executive vice president of MIGA.
“Collaborating with our partners will be crucial in crafting solutions to the challenges of our time, unlocking new opportunities, and ultimately mobilising the much-needed private sector investment to meet our development goals.”
James Scriven, chief executive officer 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.”
The partnership comes at a time when the world is facing interconnected challenges to development and recognises the crucial role of the private sector, the parties said. The collaborative efforts between 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 simultaneously mitigating risk for investors.
“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,” said Ethiopis Tafara, vice president, chief risk, legal & sustainability officer and partnerships at MIGA.
“The combined efforts are what we need to grow the pie of development projects, support a sustained recovery, and build for the future.”
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