IDB lending to Latin America & Caribbean in 2015 to decline slightly

The Inter-American Development Bank projects its total lending to 26 member countries of Latin America and the Caribbean will be slightly lower this year compared to US $13.8 billion of lending in 2014, while there will be an important change starting next year in the handling of private sector lending, an IDB spokesman said.

¨The projection is a little bit less this year,¨ said John Ferriter by telephone from the office of external relations of the IDB. He did not provide the actual total projected lending by the institution for 2015, including both sovereign and private sector loans.

It will be the second year in a row with near flat but declining lending figures for IDB. In 2013 the total lending granted, which depends partly on capital replenishment, was $14 billion, which was significantly higher than $11.4 billion during 2012, he added.

The Inter-American Development Bank was established in 1959 as a source of long-term financing for development in Latin America and the Caribbean and has remained among the biggest lenders to the area since that time.

Starting in 2016, the IDB will create a new corporation ¨to consolidate all the private sector work¨ following a decision made in March, Ferriter added.

Ferriter made the comments as he was describing a recently announced initiative under which an Organization of Petroleum Exporting Countries finance agency named OPEC Fund for International Development (OFID) and the IDB established a joint trade finance program for Latin America and the Caribbean. There has not been any lending target set under this agreement, he added.

¨It is probably a win-win where the people that administer the OFID are looking to have people with experience and knowledge of the region, and we are looking to bring other financing,¨ he said.

The new IDB-OFID initiative ¨will allow banks to borrow on commercial terms to meet the needs of under-served trade clients,¨ according to information published by the IDB.

The joint initiative builds on the success of IDB´s Trade Finance Facilitation Program (TFFP), which has been in place for a decade, Ferriter added.

Last year under the TFFP there were a total of 26 loans adding up to $482 million as well as an additional $169 million placed in guarantees through 102 issuing banks in 21 countries in Latin America and the Caribbean, Ferriter said.

The TFFP program ¨offers co-lending facilities, loans and guarantees to cover instruments such as letters of credit or promissory notes which are used in international trade finance transactions,¨ according to information published by the IDB.