INTERAMERICAN DEVELOPMENT BANK

What Is the IDB?

A long-standing initiative of the Latin American countries, the Inter-American Development Bank was established in 1959 as a development institution with novel mandates and tools. Its lending and technical cooperation programs for economic and social development projects went far beyond the mere financing of economic projects that was customary at the time.
The IDB’s programs and tools became the model on which other regional and subregional multilateral development banks were created. The IDB is the main source of multilateral financing for economic, social and institutional development projects and trade and regional integration programs in Latin America and the Caribbean. It is the oldest and largest regional development bank.

In its Charter, the founders of the Inter-American Development Bank defined its mission to be to ”contribute to the acceleration of the process of economic and social development of the regional developing member countries, individually and collectively.”
Though its statement of purpose was written almost half a century ago, the IDB continues to work toward that primary objective, adjusting the focus of its activities and operations to meet the shifting development needs of its member countries in the Latin American and Caribbean region.

The Inter-American Development Bank helps foster sustainable economic and social development in Latin America and the Caribbean through its lending operations, leadership in regional initiatives, research and knowledge dissemination activities, institutes and programs.

The Bank assists its Latin American and Caribbean borrowing member countries in formulating development policies and provides financing and technical assistance to achieve environmentally sustainable economic growth and increase competitiveness, enhance social equity and fight poverty, modernize the state, and foster free trade and regional integration.

By the end of 2006, the Bank had approved over $145 billion in loans and guarantees to finance projects with investments totaling $336 billion, as well as $2.2 billion in grants and contingent-recovery technical cooperation financing.

Public entities eligible to borrow from the Bank include national, provincial, state and municipal governments, and autonomous public institutions. Civil society organizations and private companies are also eligible.

How Does the IDB Operate?

Operations of the IDB are guided by general operational policies, common to financing activities in all fields, and sector policies, which provide guidance in specific fields of activity. The Bank also has a procurement policy and an information disclosure policy.
The IDB's lending program is guided by strategies. It has an institutional strategy as well as sector strategies.

The Bank obtains its financial resources from its members, borrowings on the financial markets, funds it administers and loan repayments. It uses those resources to finance loans, grants, guarantees and investments for development projects in Latin America and the Caribbean.
Profit is not the IDB's main goal, but it does operate under financial principles similar to those of private banks. Its administration and asset management activities include receiving interest income from its loans and using cash management strategies to invest funds not immediately needed for disbursements.

The IDB accepts comments and opinions from the public on drafts of selected strategies and policies via periodic public consultation and participation exercises. The Bank also promotes the use of participation programs to encourage project beneficiaries to become involved in project preparation and implementation activities. It has an information disclosure policy that governs access to information on its operational activities.

The IDB has numerous committees and mechanisms in place to ensure sufficient audit and oversight for its projects and administration. The Bank also evaluates its activities to systematically assess the results of the activities it finances and related processes. Finally, it has initiatives, systems and organizational mechanisms in place to measure development effectiveness in its projects and its own operations and practices.