IDB approved US$12.9B in projects for Latin America, Caribbean this year

The Inter-American Development Bank (IDB) approved a record number of projects in 2010 – 170, totalling an estimated US$12.9 billion, as the bank continues to boost its efforts to help Latin America and the Caribbean combat poverty and inequality, and promote sustainable growth.

This compares with 165 projects totalling US$15.9 billion in 2009, when the IDB expanded its lending in the face of the global financial crisis. The region’s countries have largely recovered during 2010, with the percentage of people below the poverty line falling to 31.9 per cent of the population, against 33.1 per cent the previous year, and 44 per cent in 2002. However, 180 million Latin American and Caribbean individuals are still considered poor.

Around a third of the IDB’s loan approvals in 2010 were for the region’s 19 smallest economies. The IDB’s performance in 2010 reflects a strong increase in demand from its borrowing members over the past decade. Average annual approvals have risen from US$6.2 billion for 20012005 to nearly US$11 billion for 2006-2010.

By year-end, the IDB expects to disburse around US$10.9 billion. Although this is also below the exceptional disbursements of 2009, disbursements continue the growth trend with respect to pre-crisis levels.

Overall, net flow of loans to the region will have reached around US$4.7 billion in 2010, with the poorest countries receiving an estimated US$1.9 billion in disbursements.

Approvals of non-reimbursable technical cooperation agreements also continued to grow last year, as the projects totalled an estimated US$512 million, or 41 per cent more than in 2009.

In his Year-End Report to the bank’s board of executive directors, IDB President Luis Alberto Moreno underscored that despite the devastation caused by the earthquakes in Haiti and Chile, and other natural disasters that hit Guatemala, Colombia, Ecuador, Venezuela and Brazil, the region largely succeeded in navigating the effects of financial crisis.

Moreno also underscored the growing solidity of the region’s fiscal and political institutions. He added that despite these achievements, Latin America and the Caribbean must tackle numerous development challenges in areas including social equity, education, productivity, integration, food security, and adaptation to climate change.

He also thanked the bank’s governors for approving a historic capital increase earlier this year that will enable the IDB to better assist member governments in these areas. According to the terms of the capital increase approved by the IDB’s governors in Cancún, Mexico last March, the bank’s borrowing capital will increase from US$101 billion to US$171 billion over the next five years.

President Moreno also highlighted the IDB’s response to Haiti’s needs in the wake of the January earthquake. In addition to cancelling Haiti’s debt to the bank’s fund for special operations in the amount of US$484 million, the IDB approved US$251 million in new grants for the country, and expects to disburse US$176 million by year-end. These resources were channelled to critical programmes in education, transportation, energy, finance, and water and sanitation.

“We are committed to stepping up support to the smallest and least developed countries, and to providing exceptional support to Haiti.”

For the coming years, Moreno said, the IDB will have also set ambitious targets to support the reduction of poverty and inequity, adaptation to climate change, environmental sustainability, renewable energy, regional integration, productivity and private sector competitiveness and sustainable cities.