EL GRUPO DEL BID DOING BUSINESS WITH THE IDB: AN INTRODUCTION TO THE IDB’S PRIVATE SECTOR OPERATIONS Gustavo Arnavat U.S. Executive Director Inter-American Development Bank Competitiveness Forum Suriname February 7-8, 2012 THE IDB GROUP

26 Borrowing Members 22 Non-Borrowing Members 2 T HE IDB G ROUP

United States 30% Canada 4% Japan, China and South Korea 5% Latin America and the Carribean 50.01% Europe and Israel 11% 3 IDB M EMBER C APITAL I NSCRIPTION AND V OTING P OWER

4 B OARD OF E XECUTIVE D IRECTORS 14 Chairs at the Board of Executive Directors

5 AGREEMENT ESTABLISHING THE INTER-AMERICAN DEVELOPMENT BANK ARTICLE I PURPOSE AND FUNCTIONS S ECTION 1. P URPOSE T HE PURPOSE OF THE B ANK SHALL BE TO CONTRIBUTE TO THE ACCELERATION OF THE PROCESS OF ECONOMIC AND SOCIAL DEVELOPMENT OF THE REGIONAL DEVELOPING MEMBER COUNTRIES, INDIVIDUALLY AND COLLECTIVELY. S ECTION 2. F UNCTIONS ( A ) T O IMPLEMENT ITS PURPOSE, THE B ANK SHALL HAVE THE FOLLOWING FUNCTIONS : ( I ) TO PROMOTE THE INVESTMENT OF PUBLIC AND PRIVATE CAPITAL FOR DEVELOPMENT PURPOSES ; ( III ) TO ENCOURAGE PRIVATE INVESTMENT IN PROJECTS, ENTERPRISES, AND ACTIVITIES CONTRIBUTING TO ECONOMIC DEVELOPMENT AND TO SUPPLEMENT PRIVATE INVESTMENT WHEN PRIVATE CAPITAL IS NOT AVAILABLE ON REASONABLE TERMS AND CONDITIONS ; ( B ) I N CARRYING OUT ITS FUNCTIONS, THE B ANK SHALL COOPERATE AS FAR AS POSSIBLE WITH NATIONAL AND INTERNATIONAL INSTITUTIONS AND WITH PRIVATE SOURCES SUPPLYING INVESTMENT CAPITAL. P ROMOTING P RIVATE S ECTOR D EVELOPMENT PART OF IDB M ANDATE SINCE ITS F OUNDING

6 Lending with a sovereign guarantee, including investment and policy-based loans Technical assistance to governments Sovereign Guaranteed (SG) Lending and guarantees to private sector entities and state-owned enterprises without a sovereign guarantee Technical assistance to private and public companies MIF: equity investments Non- Sovereign Guaranteed (NSG) T WO M ODALITIES TO S UPPORT D EVELOPMENT

Structured and Corporate Finance Department (SCF) Inter-American Investment Corporation (IIC) Multilateral Investment Fund (MIF) Opportunities for the Majority Sector (OMJ) T HE IDB G ROUP ’ S P RIVATE S ECTOR W INDOWS

IDB GROUP YEAR-END NSG PORTFOLIO AMOUNTS US$ Billions WE’VE INCREASED OUR SUPPORT TO THE SECTOR - 8 -

IDB GROUP The United States is a big supporter of the IDB’s private sector operations, and was one of the leading donor countries behind the establishment of the MIF and IIC  Largest shareholder of the IDB with 30%  Largest shareholder of the IIC with 20%  Largest shareholder of the MIF with 29% The IDB Group also fosters private sector development in Latin America and the Caribbean by promoting an ecosystem that is conducive to business and by working with governments to improve regulatory environments. Recent General Capital Increase lifted the previous limit of 10% on NSG lending in the IDB’s total lending portfolio subject to the boundaries of a capital adequacy model that ensures proper management of risk.

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