Devex Invested: A tale of two development banks

Over the last two weeks, I’ve flown from Luxembourg to Paraguay to bring you the latest from two development banks — the European Investment Bank and the Inter-American Development Bank. Each institution is finding — and announcing — its footing in today’s development landscape.

At the IDB annual meetings in Asunción, Paraguay, the mood was optimistic and heavily focused on the potential of private-sector finance in Latin America. At the EIB forum in Luxembourg, the tone was also upbeat — but more defensive, shaped by a growing sense that Europe may soon be carrying more of the global development system on its shoulders as the United States retreats.

In Paraguay, IDB President Ilan Goldfajn’s message was clear: Latin America is uniquely positioned to thrive in a world where aid is shrinking and private capital is becoming ever more essential. The region has the ingredients investors want, he and others argued: abundant natural resources, relatively stable macroeconomic conditions, and growing interest in technologies such as hydropower. That combination allows the bank to focus less on crisis response and more on catalyzing investment.

IDB has leaned heavily into that strategy. Goldfajn repeatedly emphasized the presence of 1,600 private sector representatives at the meetings, including 300 CEOs, underscoring the bank’s effort to reposition itself as a dealmaker rather than simply a lender. Its private arm, IDB Invest, is increasingly using an “originate-to-distribute” model — structuring projects and bringing in outside investors — allowing the relatively small institution to punch above its weight.

In other words, IDB is betting that development in Latin America will increasingly be driven by markets: critical minerals supply chains, cross-continental transport corridors, and infrastructure designed to unlock trade across the region.

In Luxembourg, the conversation at the EIB forum was shaped by a different reality: uncertainty about the future of global leadership in development. Speakers suggested that Europe may need to fill a vacuum left by the United States. EIB President Nadia Calviño framed the bank as “carrying the flag of development” at a moment when other institutions face political pressure to step back from issues such as climate and gender.

But EIB’s position is more complicated. While it is one of the world’s largest development lenders, roughly 90% of its financing still flows within Europe. Its external arm, EIB Global, remains relatively small — even as the bank pledges to expand its role abroad.

That tension surfaced during the forum. EIB leaders argued that development projects abroad can align with European interests, strengthening supply chains, trade relationships, and geopolitical stability. Critics worried that this “win-win” framing risks tilting development finance toward Europe’s commercial priorities rather than what lower-income countries actually need.

Taken together, the two meetings offered a snapshot of a global development finance system in transition. IDB is leaning into a region that sees opportunity in the private-capital boom and global demand for minerals and infrastructure. EIB, meanwhile, is positioning itself as a steward of the traditional multilateral agenda — including climate, gender, and rules-based cooperation — even as it must justify every euro spent outside its borders.

Read my wrap-up from Paraguay: Latin America has what the world needs
And don’t miss the Luxembourg edition: At the EIB forum, rhetoric is global, but funding stays local

Hiring spree

IDB is gearing up for a hiring surge as it leans further into private-sector finance. Sources tell Devex the bank plans to bring on roughly 75 new staff members, part of a broader shift to rebalance its workforce so that about half of employees are based outside its Washington, D.C., headquarters.

Much of the expansion will support IDB Invest, the bank’s private-sector arm, which is expected to grow its current workforce of roughly 525 people by about 35%. The hiring push will prioritize professionals with commercial and investment backgrounds to help structure deals and mobilize private capital for development projects across Latin America and the Caribbean.

The move follows the board’s approval of a $3.5 billion capital increase for IDB Invest in 2024 — part of a broader reform aimed at scaling the bank’s ability to crowd in institutional investors and expand development financing. As traditional aid budgets tighten globally, the bank is betting that a bigger private-sector operation — and more investment talent on staff — will help it stretch scarce public capital much further.

Read: IDB ramps up hiring of private sector professionals (Career) 

+ Looking for your next job in global development? Sign up for a Devex Career Account membership today with a 15-day free trial and unlock all our exclusive career content and the full Devex job board for unlimited access to global development’s latest job opportunities and recruiter insights.

Follow the money

IDB provides billions of dollars in funding each year and Devex development analyst Alecsondra Kieren Si did an analysis of who is winning IDB contracts.

Alecsondra broke down the data for 2024 when IDB awarded 7,000 contracts — 5,661 of those were financed via $2.1 billion in loans. The vast majority of contracts funded works, or infrastructure projects. And no surprise, Brazil got the most funding of any individual country and Brazilian contractors also raked in the most cash. China-based contracts received about $246.9 million in contracts, second only to the Brazilians.

What were all the contracts funding? Health systems, water, urban drainage, highways and roads all got a significant piece of the pie.

Read: Who were IDBs top contractors of 2024? (Pro)

+ Interested in more funding coverage? Start a five-day free trial of Devex Pro Funding today and explore funding opportunities from over 850 funders with the data analysis and industry intelligence you need to win them.

Creative measures

The Africa Centres for Disease Control and Prevention is exploring new ways to fill health funding gaps, including debt swaps. And it’s made a new hire with that in mind.

My colleague Sara Jerving sat down with Christoph Benn, who recently joined Africa CDC as a special adviser. Benn is the director of global health diplomacy at the Joep Lange Institute in the Netherlands and spent about 15 years at The Global Fund to Fight AIDS, Tuberculosis, and Malaria.

As many African countries spend more servicing debt to creditors than investing in their health systems, debt swaps could provide a solution that, by conservative estimates, unlock hundreds of millions of dollars for health care, Sara writes.

In a debt-for-health swap, a creditor would agree to cancel a portion of the debt owed by a national government if the money that is freed up is invested in health. Benn tells Sara that demand from African governments won’t be a problem, the issue is finding creditor countries willing to cancel debt.

“For some donor countries, it’s easier to cancel outstanding debt than to include new grant money into their budget,” Benn tells Sara. But he also warns that these deals will take time, likely around 18 months, because they are complex transactions.

While debt swaps have been more often used for climate and nature-related financing, there is a growing effort to use them to address other development challenges — in this case it is health, but the World Bank and its guarantee arm have recently backed debt for education swaps in Angola and Côte d’Ivoire.

Read: Africa CDC eyes debt swaps to plug health financing gaps (Pro)

+ What else is in the works for health financing in Africa? This Friday, March 20, we’ll sit down with Donald Kaberuka, the high representative for financing at the African Union and former president of AfDB, to talk about how rapid shifts have changed the global health architecture and the reforms needed to deliver better health outcomes in the decade ahead. Register here to join us.

What we’re reading

Chinese development finance and debt crises in the global south. [Global Policy]

Netherlands-based cooperative bank Rabobank launches impact investing platform with €1 billion target. [ESG Today]

Baku to Belém and beyond: Strengthening the U.K. investment landscape to support climate transition in emerging markets and developing economies. [EMDE Investor Taskforce]

Adva Saldinger contributed to this edition of Devex Invested.