IDB Invest, the Inter-American Development Bank’s private sector arm, has announced a new deal that will free up $500 million in new lending by offloading risk to investors.
The institution hopes the deal will pave the way for a new asset class of multilateral development bank investments.
The new lending is possible thanks to a securitization transaction that IDB Invest put together called Scaling4Impact. Through the deal, IDB Invest took $1 billion of its investments and pooled them together into a financial vehicle with different levels, or tranches, that appeal to different types of investors based on their risk appetite and return needs.
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About the author
Adva Saldinger@AdvaSal
Adva Saldinger is a Senior Reporter at Devex where she covers development finance, as well as U.S. foreign aid policy. Adva explores the role the private sector and private capital play in development and authors the weekly Devex Invested newsletter bringing the latest news on the role of business and finance in addressing global challenges. A journalist with more than 10 years of experience, she has worked at several newspapers in the U.S. and lived in both Ghana and South Africa.
