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China to provide $2 billion for projects in Latin America and the Caribbean

OTHER NEWS AFFECTING PROJECTS & PM 

IDB-managed Fund to provide additional resources for key public and private sector development projects 

17 March 2013 – Washington, DC – The Inter-American Development Bank (IDB) has announced that the bank and the People’s Bank of China (PBC) have approved the China Co-financing Fund for Latin America and the Caribbean to support public and private sector projects that promote sustainable economic growth in the region.

The Inter-American Development Bank (IDB) and The Fund, the first of its kind established by China and a multilateral development bank, will provide capital to complement the IDB’s own resources for projects seeking to alleviate poverty and reduce inequality, boost private sector investment, improve competitiveness and social welfare, and support programs to mitigate the impacts of climate change and promote greater gender equality.

louis-alberto-moreno“China is a key partner for the Bank’s mission to alleviate poverty and inequality in the region,” said IDB President Luis Alberto Moreno (pictured). “This partnership is another example of our efforts to promote greater South-South cooperation to narrow funding gaps in sectors with high developmental impact and enhance the social and economic impact of our projects. It will serve as a benchmark for future models of cooperation with China and other countries.”

In partnering with the IDB, China hopes to channel its resources toward development finance projects that require additional financing to make them viable.  The proposed $2 billion contribution by China will be used to co-finance a total of up to $500 million of IDB public sector loans and up to $1.5 billion for loans made by the Bank to private sector entities. Co-financing Fund resources will be used to complement IDB loans, subject to pre-established limits. The funds from China will be available for the next three years for public sector projects and the next six years for non-sovereign guaranteed operations.

In early January, China officially became the 48th member country of the IDB, after the bank’s board of executive directors approved its entrance. IDB president Luis Alberto Moreno and members of his management team then visited China in early February to promote investment in Latin America and the Caribbean (LAC) and seek further cooperation opportunities.  Since 1990, bilateral trade has been growing at an annual rate of 27 per cent. China is now the region’s second biggest trading partner, after the United States.

Established in 1959, the Inter-American Development Bank (IDB) is a source of multilateral financing for sustainable economic, social and institutional development programs and projects throughout Latin America and the Caribbean.  More information about the IDB is at www.iadb.org.  For more about IDB projects, visit http://www.iadb.org/en/projects/projects,1229.html.

Source: Inter-American Development Bank