A New Business Model to Scale Impact in Latin America and the Caribbean
By bridging regional challenges and opportunities with capital markets, IDB Invest makes a real difference on social, economic, and climate issues and paves the way for a sustainable and prosperous future.
We just closed our global roadshow, during which we engaged with over 130 global market participants to present our new business model and recently approved capital increase.
Partnering with Bolsa Institucional de Valores (BIVA), the London Stock Exchange Group, and Daiwa Capital Markets, this genuinely transformative journey for all of us at IDB Invest took us to Mexico, London, Tokyo, Seoul, and New York.
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The purpose was to introduce and discuss the new business model with investors, bankers, and debt capital market stakeholders.
The model aims to mobilize significant private sector capital for development projects across Latin America and the Caribbean.
Attendees expressed keen interest in discussing the implications of the recent capital increase and the subsequent transformation of IDB Invest.
Driven by these strategic changes, the funding program is poised to double in size over the next several years.
Challenges and opportunities
The region faces numerous global challenges, including climate disasters, deforestation, and food security issues.
However, it also holds immense potential to lead the transition to renewable energy, enhance food security, and promote sustainable growth through the bioeconomy.
IDB Invest’s new business model, originate-to-share, bridges global capital markets with these regional challenges and opportunities, fostering a sustainable economy.
We will significantly boost our investments with this new model and a capital increase of $3.5 billion.
Originate-to-Share
At the heart of IDB Invest’s new business model lies the “originate-to-share” strategy. This approach allows us to maximize impact by freeing up capital and increasing the number of projects we can support.
How it Works
Originate IDB Invest identifies and starts (originates) investment opportunities in Latin America and the Caribbean. Our deep knowledge of the region allows us to identify projects with significant impact. Share We offer (share) parts of these investments to commercial investors instead of holding them until they mature. Why This Model?
Free Up Capital By sharing investments, IDB Invest can quickly reinvest in new projects and scale impact. Increase Deal Flow With more capital available, IDB Invest can support more projects, increasing the number of development opportunities. Attract More Investors Sharing investments brings in commercial investors who might need more expertise or risk appetite to invest in the region, mobilizing more money for development. Benefits
Efficiency This model makes IDB Invest more efficient by allowing it to recycle its capital and take on more projects. Risk Management Sharing investments helps spread the risk among more investors, making it safer for everyone involved. Market Development As IDB Invest moves on to new projects, it leaves behind more mature markets that can attract purely commercial investments, helping these markets grow independently.
WATCH: IDB Invest's CEO, James Scriven, presents the Originate-to-Share model at our Annual Meeting (2024)
Long-Term Vision
IDB Invest’s new business model is built on a foundation of collaboration and innovation.
By engaging with investors and stakeholders globally, the organization aims to create a sustainable future for the region.
This model mobilizes private investment at scale, transforming IDB Invest from a "buy and hold" deal originator to an "originate-to-share" conduit.
This approach will channel capital from global and regional investors to impactful projects that address social challenges, climate change initiatives, and gender equality, diversity, and inclusion (GDI).
The new targets include 60% of projects supporting green finance and GDI, reflecting a strong commitment to sustainable development.
A Prosperous Future
IDB Invest’s new business model represents a bold step towards scaling impact in Latin America and the Caribbean.
By connecting local markets with global capital, fostering innovation, and addressing critical regional challenges, IDB Invest is paving the way for a sustainable and prosperous future.
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As the organization continues operating in the global and local capital markets, it remains dedicated to mobilizing resources and driving development that improves lives across the region.
To date, IDB Invest has issued $13 billion in bonds worldwide, with over $5 billion dedicated to sustainable initiatives.
Authors
Orlando Ferreira
Orlando Ferreira, a Paraguayan national, is the Chief Finance and Administration Officer of IDB Invest. He is responsible for managing the company's financial resources. He has deployed successful financial and investment strategies while implementing an annual funding program reaching US$2.8 billion, which has positioned IDB Invest as a key Sustainable Bond Issuer. Before this role, he served as Chief Strategy Officer and Operating Officer. Mr. Ferreira joined the organization as a Senior Advisor to the CEO in 2006 and later held several Division Chief positions. Orlando is passionate about development and pioneered the first Inter-American Investment Corporation initiative to measure, track, and report on the results of each operation Development Impact and Additionality Scoring System. Also established the first strategic planning framework for the Organization. He also served on the IDB Group's Board of Executive Directors from 1999 to 2005. Before that, Mr. Ferreira worked for 15 years in Paraguay's construction, financial, and advisory services sectors. He holds a degree in economics from the Universidad Nacional de Asunción in Paraguay, a graduate degree in Economics from the same university jointly with Universidad de Santiago de Chile, and a master’s degree in finance from The George Washington University.
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