Scoop: IDB to unlock $3.5B increase with US signing on

The Inter-American Development Bank is set to unlock a long-awaited capital increase for its private sector arm, a move that could significantly expand lending to businesses across Latin America and the Caribbean, sources told Devex. Two years ago, shareholders agreed to boost the capital of IDB Invest by $3.5 billion. The announcement that the money will be officially disbursed is expected tomorrow. One source told Devex that the bank received a “letter of subscription” from the United States on Monday — a legally binding document confirming Washington will participate in the capital increase. The U.S. contribution is particularly notable given the Trump administration’s broader retreat from some international development institutions. The milestone comes as multilateral development banks face mounting pressure to mobilize more private capital while public budgets tighten. The new capital will allow IDB Invest to take on greater risk, expand investments, and finance projects in smaller or underserved markets — particularly in Central America and the Caribbean, which have historically received less attention than larger regional economies such as Brazil or Argentina. For the wider Inter-American Development Bank group, the expansion is part of a broader strategy to rethink how development finance works. In recent years, the bank has been experimenting with an “originate-to-share” model, in which it launches projects and then transfers portions of them to private investors earlier in the process, freeing up its balance sheet to back new investments. “Last year, the IDB Group delivered $35 billion in financing, the highest level in our history and about 50% higher than in 2022 — achieved without a general capital increase,” IDB President Ilan Goldfajn told Devex in an email. “It shows we are finding ways to make our resources work better and deliver greater impact.”