IDB Invest increases COVID-19 response from $5 billion to $7 billion as crisis worsens
- Commitment to clients and trade finance underscores largest development finance response in Latin America and the Caribbean
Today IDB Invest, a member of the IDB Group, received approval from its Board of Directors to increase its COVID-19 response to $7 billion in financing, which includes an additional $500 million in long-term investments and $1.5 billion in trade finance operations. In addition to the $7 billion, IDB Invest plans to mobilize capital from third-party investors.
Given the deepening crisis, IDB Invest’s Board of Directors increased its lending capacity to support new and existing clients who experience short-term financial or operational issues as a result of the health pandemic and economic downturn. The goal is to finance interventions that alleviate healthcare constraints, maintain jobs, restore supply chains and sustain sources of income, especially for micro, small and medium enterprises (MSMEs).
IDB Invest’s long-term support will come in the form of liquidity and working capital lines for corporates in sectors such tourism, agribusiness, manufacturing and technology; bank, non-bank, trade and supply chain financing focused on underlying MSMEs; and infrastructure projects for ongoing developmental impact. IDB Invest is especially ambitious in Caribbean and Central American countries, which will likely be hardest hit by the crisis.
As liquidity declines, exacerbated by capital flight from emerging markets, demand to support trade finance for the region’s MSME importers and exporters is expected to grow. In March of 2020, the Trade Finance Facilitation Program (TFFP) saw demand increase 245% year-on-year in terms of volume. To support clients and the underlying MSMEs that often benefit from trade finance in times of credit shocks, IDB Invest will increase its guarantee and lending program by $1.5 billion for a total of $3 billion under the TFFP.
To manage the high levels of demand for financing, IDB Invest is prioritizing clients based on their sound credit fundamentals; their environmental, social and financial sustainability; their contribution to the UN Sustainable Development Goals and their ability to have a demonstration effect in local economies.
This is part of a Group-wide effort that complements existing commitments by IDB and IDB Lab to support countries and entrepreneurs responding to the health crisis and its consequences.
About IDB Invest
IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social and environmental development in the region. With a portfolio of $12.1 billion in asset management and 333 clients in 24 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.