Example

PRIVATE SECTOR
WITH PURPOSE
IDB seeks to create opportunities for current and future
generations in Latin America and the Caribbean through
sustainable private sector investments.
If it’s not purpose, it’s not IDB.
2

WE CAN
SUPPORT
YOU
IDB works with large- and medium-
sized businesses, including private
utilities and infrastructure operators,
banks and financial market institutions,
state-owned entities without a
sovereign guarantee and corporations.
Our financial and technical solutions
help businesses meet their financial
needs while improving the living
standards of people across the region.
WE
SUPPORT
YOU
IDB works with large– and medium–sized
businesses, including private utilities and
infrastructure operators, banks and financial
institutions and state-owned enterprises.
Through the Structured and Corporate
Finance Department (SCF), IDB partners
with private sector entities to achieve
breakthrough financial results with high
development impact.
3

• Loans
• Syndicated loans (B loans and parallel loans)
• Guarantees
• Climate change concessional finance
Financial Services
Technical Cooperation
• Resources for project preparation
and execution
• Clean energy audits
• Shared value appraisals
• Knowledge creation and sharing tools
OUR TOOLS
4

48 member countries,
including 26 borrowing
members
26 country offices
throughout Latin
America and the
Caribbean, one in
Madrid and one
in Tokyo
AAA/Aaa ratings
by Standard & Poor’s
/Moody’s
Largest source of
development financing
for Latin America
and the Caribbean
since 1959
OUR REACH
5

WE KNOW
YOUR
BUSINESS
IDB offers unique industry experience. Our
investment officers know how to create
tailored financial and technical solutions that
work. Our experience extends across a range
of economic sectors.
6

Social
Infrastructure
Industries
and Services
SyndicationsFinancial
Markets
Infrastructure
PAGE 8
PAGE 12
PAGE 29
PAGE 18
PAGE 40
7

Facilitating the
development of advanced
infrastructure projects
InfrastructureInfrastructure
8

We work in collaboration with
governments and concessionaires to
ensure projects are viable financially,
socially and environmentally from the
outset. Our priority areas include:
• Energy
• Transportation
• Water and sanitation
• Public-private partnerships
IDB helps take on large infrastructure projects that
are complex and knowledge intensive.
9

Investing in Hydropower:
Peru and Costa Rica
C A S E S T U D Y
IDB IS PLAYING a leading role in
catalyzing private sector financing
to complete much-needed renewable
energy projects in wind, solar
and hydropower.
While wind has taken off in recent
years, IDB is witnessing a surge in hydro
projects that not only strengthen the
region’s water infrastructure and low
carbon growth, but also incorporate
environmental and social best practices
that go beyond business as usual.
Chaglla (Peru):
With project costs totaling approximately
$1.2 billion, of which $150 million was
provided by the IDB, the Chaglla project
is an example of IDB’s desire to invest in
projects that increase the competitiveness
of a company and its financial returns, and
at the same time create new opportunities
for current and future generations:
• Chaglla generates more than 400
MW with a reservoir of just five
square kilometers and is designed
to keep the environmental impact
to a minimum by camouflaging 16
kilometers worth of tunnels
in nature.
• 100 percent of the unskilled labor
force comes from the surrounding
community. In addition, Empresa de
Generación Huallaga, a subsidiary of
Odebrecht, invested in the educational
10

C A S E S T U D Y program CREER to provide additional
qualified labor training to more than
1,300 people from Chaglla.
Reventazón (Costa Rica):
Central America’s biggest renewable
energy project to date, the Reventazón
project received an IDB loan approval
for $200 million to build a 305 MW
hydropower plant along the Reventazón
River in Costa Rica. This project is
trailblazing in many ways:
• The first hydropower plant to establish
an offset for river habitat in Central
America, Reventazon will contribute to
the Jaguar Corridor Initiative and long-
term preservation of the largest living
cat in the Americas. This environmental
offset model could be replicated in
other projects throughout the region.
• Once completed, the project will
represent roughly 10 percent of
Costa Rica’s total installed electricity
generation capacity and will contribute
to the country’s goal of reducing its
carbon emissions.
11

Financial Markets
Promoting strong and
sustainable financial
systems
Financial MarketsFinancial Markets
12

The Financial Markets Division of the IDB’s
Structured and Corporate Finance Department
contributes to the creation of sustainable financial
systems in LAC by combining knowledge and
experience with tradition and innovation.
The IDB’s beyondBanking: banking on global
sustainability program is the platform to achieve
this objective.
1) Green Lines: Supports financial intermediaries
to help reduce their direct and indirect
carbon footprints.
2) Access2Finance Lines: Supports financial
intermediaries to reach specific stakeholders
through customized credit lines:
• access2Capital Markets: Offers credit
enhancement mechanisms and allows financial
intermediaries to diversify funding sources.
13

• access2People: Fosters more inclusive financing
for households traditionally excluded by
mainstream markets.
• access2Services: Offers clients financing to
support key services such as health, education
and infrastructure.
• access2SMEs: Provides clients financing to
support SMEs and help reduce the gap in access
to finance.
• access2Trade: Supports banks and funds
through a trusted trade finance network that
promotes intra-regional and global integration.
www.iadb.org/beyondbanking
14

CAMIF: Closing the financial gap in medium-
sized infrastructure projects
C A S E S T U D Y
Overview
To strengthen development in Central
American countries, it is imperative to
invest in infrastructure. However, only
2 percent of GDP is currently invested
when at least double is needed. This
is why private sector participation is
essential to complement the efforts of
public institutions. Mid-sized companies
in Central America face two barriers:
difficulty accessing credit and the
perception among investors that small
countries are higher risk. IDB, alongside
other partners, supports the Central
American Mezzanine Infrastructure
Fund (CAMIF), which seeks to close the
financing gap for mid-sized companies.
Highlights
IDB approved a loan of $60 million to help
meet the need for medium- and long-term
financing for the infrastructure sector in
Central America and to a lesser extent
in Colombia and Mexico. With additional
resources from the Central American Bank
for Economic Integration (BCIE) and other
public institutions and private investors,
the fund reached US$150 million.
In total, eight projects were financed in five
countries (Colombia, Dominican Republic,
Guatemala, Honduras and Mexico). The
projects focused on renewable energy,
transportation, telecommunications and
natural resources.
15

Development Impact
The fund supports projects focused on
mid-sized and family-owned businesses
and, by doing so, has a broad impact on
society. The fund-supported projects
are improving social and environmental
practices in the region—going beyond
minimum legal requirements—and
generating jobs and creating shared value
between communities and businesses. In
numbers, this translates into:
Employment
• Maintaining 1,502 existing jobs
• Hiring 1,267 short term contractual
workers
• Creating 800 new full time jobs,
increasing by half the workforce of the
fund-financed companies
Environment
• Generating 90 MW of renewable energy
(hydro and biomass)
• Reducing CO2 emissions in Colombia
and Guatemala by
1.72 million tons
Noteworthy CAMIF projects include:
• Río Las Vacas Hydroelectric Plant
(Guatemala): A 45 MW hydroelectric
plant near Guatemala City. Since CAMIF
invested in the company, 70,000 tons
of CO2 have been avoided, and a waste
removal and recycling system has been
established.
• Propalma (Mexico): A family-owned
company that produces palm oil in
Chiapas, one of the poorest states in
Mexico. Palm-oil imports have declined
and local consumption has increased
thanks to the construction of a new
C A S E S T U D Y
16

refinery, the growth of working capital and
the expansion of the plantation territory.
This project stands out for its support of
small and micro palm producer programs,
which include agricultural inputs and
sustainability training. Small and micro
producers provide approximately 90
percent of Propalma’s raw materials.
• Honduran Green Power Corporation
(Honduras): A company created to build
a 35 MW biomass electricity plant. The
project has two objectives: to reduce
the amount of fossil fuel used for
energy generation, and to create an
independent energy supply network in
the industrial sector of San Pedro Sula.
Given the success of this operation, the
IDB decided to participate in a second
CAMIF fund, which will expand its scope of
action to Caribbean countries and aims to
reach US$250 million.
C A S E S T U D Y
17

Industries and Services
Building private investment
in productive industries and
services sectors
Industries and Services
18

We help clients identify ways to scale
up business operations that maximize
sustainable results. Our priority areas include:
• Agribusiness
• Clean fuel alternatives
• Industrial energy efficiency
• Manufacturing and logistics
• Sustainable mining, gas and forestry
• Tourism
IDB supports private investment strategies for a range of
companies in productive industries and services sectors.
19

IDB IS SUPPORTING Montes del
Plata Group through a $200 million loan
to build and operate a eucalyptus pulp
plant and a biomass electricity plant.
The largest private sector investment
in Uruguay’s history (approx. $2 billion),
it follows strict environmental and
social standards for renewable forestry.
Given its size, Montes del Plata has a
strategic importance for the positioning
of Uruguay’s forest products sector and
is expected to:
• Create 5,800 and 5,350 jobs during
construction and operations,
respectively
• Produce 160 MW of renewable energy
(approx. 70 MW exceed internal needs
and will be supplied to the national grid
and other industrial entities)
• Contribute approximately $750
million annually to GDP and generate
approximately $700 million in exports
each year (approximately 11% percent
of Uruguay’s total exports in 2009)
Montes del Plata:
Promoting Renewable Forestry Practices
C A S E S T U D Y
20

Slideshow: Montes del Plata
Located 190 km west of Montevideo, Uruguay in Punta Pereira, Montes del
Plata’s industrial complex is the future site of a eucalyptus plantation-based
pulp production plant.
21

The largest private sector investment in Uruguay’s history, Montes del Plata was
approved for a $200 million IDB A loan and a $254 million IDB B Loan in 2011 to
help finance the construction and operation of the eucalyptus pulp mill.
22

The Montes del Plata project also includes a 160MW biomass electricity
generation plant, a fluvial port terminal and barge terminals with a wood
yard and chipping plant.
23

The mill’s power unit – the largest biomass generator in Uruguay – will cover the
plant’s electricity needs and supply additional energy to the Uruguayan power grid.
24

Montes del Plata expects to create about 5,800 direct and indirect jobs during
the construction phase and 5,350 direct and indirect jobs during operations.
25

The project follows IDB’s high environmental standards related to the industry
and industrial associated process.
26

Weighing more than 124 tons and reaching 30 meters in height, this recovery
boiler is the heaviest object transported in Uruguay – ever. It converts heat into
steam energy.
27

Once operational, Montes del Plata is expected to contribute about $747 million
per year to the country’s GDP, with exports reaching $697 million (approximately
11% of all Uruguay exports in 2009).
28

Partnering with the private
sector to provide health and
education services
Social Infrastructure
29

IDB facilitates private sector provision of
affordable health and education services
to middle- and low-income families and
underserved populations. Our priority
areas include:
• Education (e.g., higher education, specialized
schools and school-to-work programs)
• Healthcare (e.g., hospitals, health clinics,
pharmaceuticals)
IDB’s vast experience in health and education make it an optimal
partner for private sector companies, entrepreneurs and financial
intermediaries seeking to invest in these social sectors.
30

C A S E S T U D Y
THE EXPLOSIVE demand for higher
education in Latin America and the
Caribbean is both an opportunity and
a challenge for ensuring quality and
equity of access. As a leading player
supporting private sector education in
the region, IDB works with its borrowers
to enhance quality and equity of access
in their businesses. In Ecuador, IDB is
supporting the Universidad Politécnica
Salesiana (UPS), a socially inclusive
private university with 18,000 students,
the majority of them middle- and lower-
income. UPS also has a specialized
program for indigenous students.
• Through a $15 million IDB loan, UPS
will expand its campus and provide
affordable high-quality education to
an additional 5,000 middle-to-low
income students in Quito, Guayaquil
and Cuenca
• IDB’s support will also help UPS
improve its infrastructure and
acquire state-of-the-art equipment,
benefitting those lower-income
students who cannot gain entry to
Ecuador’s free public universities
• Proceeds from the IDB loan will also
be used to set up a $2 million student
loan fund, which is being designed to
be more favorable than current student
loan offerings available in the market
Universidad Politécnica Salesiana: Access to Higher
Education for Lower-Income Students
C A S E S T U D Y
31

Slideshow: Universidad Politécnica Salesiana
A socially inclusive Catholic university, UPS offers higher education
services to approximately 18,000 students and has a dedicated program
for indigenous communities.
32

Volunteer students use audio-based technology to teach blind students to
use computers. UPS offers student loans that can be repaid through voluntary
community work.
33

The university trains a select group of students to teach young children in
remote communities.
34

When students cannot access the university, UPS goes to the students. These
indigenous children learn from newly trained UPS teachers.
35

Many Ecuadoran women directly or indirectly benefit from the education that
UPS provides.
36

UPS sponsors a unique dairy program that supports one of the key income-
generating sectors in rural Ecuador. In this picture a student tests a cow’s
health and ensures its milk is safe for consumption.
37

Once the milk has been tested and found safe, dairy farmers receive the
necessary documentation to qualify for sales to corporate distributors.
This significantly increases the farmers’ revenue, as their products are then
marketed nationally.
38

This mother and daughter’s income and quality of life has improved thanks to
the UPS dairy program.
39

Magnifying the
development impact
of the private sector
Syndications
40

Through our syndications program, IDB increases
the development impact of the private sector.
We mobilize needed financing for businesses across Latin
America and the Caribbean. Acting as a catalyst, we leverage
our own investments (A loans) and mobilize other sources for
co-financing through our B loans and parallel loans.
41

KEY BENEFITS OF
IDB’S B LOAN PROGRAM
IDB acts as the Lender of Record and administers
the entire loan
IDB fully shares project risks with participants
Participants benefit from IDB’s privileges and
immunities, including preferred access to foreign
exchange and exclusion from general country
debt reschedulings
Participants are exempt from withholding taxes
Tenors can go two to three years beyond the
commercial market
One Loan Agreement
Preferred Creditor Status
Distributes Risks
Tax Exemptions
Longer Tenors
42

POWERFUL
PARTNERSHIPS
Powerful partnerships are the core of our
success. We approach every challenge as
unique and actively engage the greatest
minds and institutions to ensure that we
live up to our mission.
43

IDB partners with clients to measure, monitor and evaluate
the project’s contribution to the economic and social
development of a country or the region. From design to
completion, our dedicated team works hand in hand with
clients to achieve strong development results.
PARTNERING
FOR RESULTS
44

Designing
for Results
Monitoring
Progress
Identifying
Impacts
At the outset, IDB partners with clients during
the proposal phase to identify the development
challenges to be addressed, and the expected
social and economic development results.
At implementation, IDB works with clients on
an annual basis to track the progress of the
development results outlined in our Development
Effectiveness Matrix.
Throughout the life of a project, IDB identifies
opportunities to improve the living standards of
people, reduce the effects of climate change and
support the funding needs of SMEs.
45

The private sector plays a pivotal role in the solution to the
climate crisis. IDB understands the challenges faced by
businesses and has scaled up lending. By 2015, we aim to
dedicate an unprecedented 25 percent of IDB total annual
lending to climate investments.
PARTNERING
FOR CLIMATE
SOLUTIONS
46

To boost private sector investments,
IDB has created two financially
innovative funds:
• The Canadian Climate Fund for
the Private Sector in the Americas
(concessional loans)
• The Nordic Development
Fund (grants)
$250 Million Canadian Climate Fund
for Private Sector in the Americas
• The first of its kind for Latin
America and the Caribbean, this
fund aims to catalyze private
sector investments in climate
change mitigation and adaption.
• How does it work? Through
concessional loans, the
fund offers businesses much-
needed mezzanine capital
and longer payback options
to incentivize investments
in solar, reforestation and
geothermal energy, among
other sector.
Increasing Energy Efficiency in
Central America
• The Nordic Development Fund
(NDF) provides grants to help
Central American companies
increase their energy efficiency
and adopt clean technologies.
• How does it work? NDF finances
detailed energy audits to identify
opportunities for businesses to
reduce costs and greenhouse
gas emissions.
47

PARTNERING FOR
SHARED VALUE
More and more, clients come to IDB
looking to increase both their
competitiveness, and their social and
climate impact, thus improving returns
for their business and community and
deriving an investment with shared-value.
IDB offers shared value appraisals of
a company’s growth outlook within
the context of surrounding societal
challenges by:
• Surfacing shared-value investment
opportunities
• Providing in-depth cost-benefit
analysis for the identified investment
• Offering in-house specialists trained
to prepare investment plans
48

C A S E S T U D YC A S E S T U D Y Chile: Subsole
Creating Shared Value in Action
SUBSOLE, THE LARGEST Chilean-
owned fruit exporter, has found success
in the combination of an inclusive
business model, quality produce and
sustainable farming techniques. A long-
standing client of IDB, Subsole generates
22,740 jobs and through its small- and
medium-sized producers reaches as
many as 56,850 beneficiaries. In addition
to groundbreaking labor initiatives, such
as the provision of meals, medical care,
transportation and accommodation for
its workers, Subsole has embarked on a
path toward energy efficiency.
Shared-Value Investment Solution
• Invest in technology to increase
farmers’ yields
• Design and implement gender-
focused training
• Invest in solar power for improved
energy efficiency
Benefits to Subsole
• Higher revenues because of improved
supply and increased production
• Increased worker productivity as a
result of job training
• Reduced energy costs through use of
solar alternatives
Benefits to Community
• More profitable local farms
• Greater retention and advancement of
working women
• Lower carbon footprint
49

Slideshow: Subsole
Twenty years ago, a group of Chilean agronomists and experienced farming
families had a vision of creating a new type of fruit exporting company.
50

Slideshow: Subsole
This company would have an inclusive business model where growers would
share in the benefits of the company’s development.
51

Slideshow: Subsole
Today, Subsole is the largest Chilean-owned fruit exporter. It is comprised of
different companies at key points in the fruit-supply chain and has a significant
impact along the entire chain.
52

Slideshow: Subsole
It spends a substantial portion of its operating costs on transferring knowledge
and technology to farmers, helping them meet the latest international
environmental and labor standards.
53

Slideshow: Subsole
The company understands the powerful combination of quality and
sustainability. The potential impact of IDB support to Subsole is substantial.
54

Slideshow: Subsole
IDB’s $32 million loan and technical assistance will allow Subsole to scale up
production, expand cold storage and processing facilities and create jobs through
its supply chain.
55

Slideshow: Subsole
A portion of the loan financed the construction of a photovoltaic plant, which
was completed in April 2012. The 300 kWp (kilowatt peak) plant is one of the
first installations of this type in the Atacama Desert.
56

Slideshow: Subsole
IDB’s support will allow Subsole to increase output by 60 percent between 2011
and 2014, benefitting 275 small and medium producers, creating over 10,000
direct and indirect jobs and ultimately, resulting in over 82,000 beneficiaries.
57

IDB looks for high-impact projects that contribute
toward the Bank’s mission for economic and social
development. Explore our project cycle to learn more.
PROCESS BUILT
ON PARTNERSHIP
58

1
2
3
4
5
Eligibili
ty
Proje
ctMonitoring
Approval Process
&
DueDiligence
M
andateLetter
DisbursementClosing/
A project can take between two to eight
months and typically runs through five
milestones: Eligibility, Mandate Letter and
Due Diligence, Approval Process, Closing/
Disbursement, and Project Monitoring.
Apply for Financing:
www.iadb.org/scf
IDB Project Cycle
59

1
2
3
4
5
Eligibili
ty
&
DueDiligence
M
andateLetter
DisbursementClosing/Proje
ctMonitoring
Approval Process
IDB seeks high-impact projects
supported by viable business
plans that contribute to
the development of an IDB
borrowing member country.
Sign confidentiality agreement
Complete environmental and social
project documents
Conduct integrity screening
and sign integrity form
Determines eligibility of the project
in eligibility review meeting
= Client
= IDBEligibility
1
IDB Project Cycle
60

1
2
3
4
5
Eligibili
ty
&
DueDiligence
M
andateLetter
ctMonitoring
Approval Process
IDB and client sign mandate
letter, a formal commitment
to advise on and arrange the
project financing. Once signed,
due diligence begins.
Sign mandate letter; client provides
analysis fees
Submit non objection letter request
to the government of project location
Hire of external consultants (if
applicable)
Begin credit and financial analysis
Carry out due diligence missions (social,
environmental, financial and legal)
Publish project abstract, environmental
and social strategy on IDB website
Conduct impact assessment
(if applicable) with sponsor’s
authorization
Negotiate and agree on term sheet
Mandate Letter
& Due Diligence
2 = Client
= IDB
IDB Project Cycle
61

1
2
3
4
5
Eligibili
ty
&
DueDiligence
M
andateLetter
ctMonitoring
Approval Process
IDB Board of Executive
Directors approves the project
and instructs the signing of
the loan or guarantee.
Prepare loan proposal document
with term sheet
Review quality and risks of the terms and
conditions of the proposed loan
Approve the document
Publish revised project abstract and
environmental and social management
report on IDB website
Submit loan proposal to board of executive
directors for consideration
3
Approval Process
= Client
= IDB
IDB Project Cycle
62

1
2
3
4
5
Eligibili
ty
&
DueDiligence
M
andateLetter
ctMonitoring
Approval Process
The financial closing of
the transaction may take place
any time after board approval.
Once signed, the loan can
be disbursed.
Reach agreement on loan documents
Approve final term sheet and
legal agreements
Establish meeting of conditions precedent
Sign documents
Make first disbursement
44 Closing/
Disbursement
= Client
= IDB
IDB Project Cycle
63

1
2
3
4
5
Eligibili
ty
&
DueDiligence
M
andateLetter
ctMonitoring
Approval Process
During the life of the loan,
IDB partners with clients to
ensure successful project
execution and timely
disbursements. IDB helps
track and report on projected
development results.
Monitor compliance with contract
requirements
Conduct annual site visits
Provide timely information (financial,
technical, environmental, social)
Process disbursements
Make repayments
Track and report development results
5 Project
Monitoring
= Client
= IDB
IDB Project Cycle
64

OUR VISION
GUIDES US
Our financing solutions and capacity building
products will enable our clients to improve the living
standards for 15 million people, make climate and
environmentally friendly investments and meet the
funding needs of 250,000 SMEs by 2015.
65

CONTACT
US
Contact an investment officer in Washington, D.C.,
USA or in the 26 country offices.
futurefinance@iadb.org
www.iadb.org/scf
66

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