Member countries will give the Inter-American Development Bank a capital increase of $70 billion to increase funding in Latin America, the Washington-based lender said.
Its 48 member countries will inject $1.7 billion over five years and pledge to make available the remaining amount if needed, the bank said in a statement on its website today.
The capital boost approved by the Board of Governors on Jan. 31 will allow the IDB to provide annual financing of $12 billion through 2021, up from an average of $8 billion over the past decade, according to the statement. The focus of its activities will be on smaller economies.
The financial injection coincides with a period of robust growth in Latin America. The region’s economies grew by 4.6 percent on average last year, compared with 1.6 percent growth for advanced economies, according to the International Monetary Fund.
Demand for development lending in the region accelerated after the global financial crisis in 2008, particularly in more vulnerable, smaller economies, according to the IDB website.
The IDB, which was created in 1959, provides loans, grants, and technical assistance to partners in Latin America and the Caribbean on a range of projects from poverty reduction to climate change and regional integration.
The IDB’s largest shareholder is the U.S., with Brazil and Argentina in second place with equal shares. The 22 non-borrowing members that contribute capital and have voting rights include the U.S., Canada, Japan, Israel, Korea, China and 16 European countries.
The most recent capital increase was approved in 1995 and finalized in 1999.