IDB and EIB Forge New Deal to Boost Sustainable Development in LAC
By pooling expertise and leveraging risk-sharing mechanisms, the IDB and EIB aim to create more bankable projects attractive to global investors.
- Country:
- Spain
At the Fourth International Conference on Financing for Development (FFD4) in Seville, a landmark cooperation agreement was signed between the Inter-American Development Bank (IDB) and the European Investment Bank (EIB). The pact represents a powerful reinforcement of the multilateral development framework, aimed at scaling financing and delivering stronger development outcomes across Latin America and the Caribbean (LAC).
By aligning the financial instruments and strategic priorities of both institutions, the agreement supports the European Union’s Global Gateway initiative and enhances its application in the LAC region. The collaboration will catalyze resource mobilization, co-financing opportunities, and policy alignment to accelerate progress toward sustainable development goals (SDGs).
Shared Vision: Transforming Priorities into Ground-Level Results
The agreement marks a commitment to closer systemic collaboration between the IDB and the EIB, acknowledging the urgency of addressing development challenges through joint action, increased capital mobilization, and innovative financial tools. It is built around four primary pillars:
1. Scaling Up Joint Financing Initiatives
The institutions plan to intensify co-financing arrangements, particularly in sovereign-guaranteed lending. This includes expanding the use of Results-Based Loans (RBLs) that link disbursements to measurable development outcomes in sectors such as:
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Clean energy and climate resilience
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Sustainable agriculture
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Digital transformation
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Health and education infrastructure
These instruments will help countries implement targeted reforms while ensuring accountability and tangible impact.
2. Mobilizing Private Sector Capital
Recognizing the limits of public finance, the agreement emphasizes the need to unlock private investment by reducing risk through:
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Blended finance models combining concessional and commercial capital
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De-linked guarantees and co-guarantees to protect investor exposure
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Enhanced coordination on non-sovereign operations, particularly infrastructure and innovation-driven sectors
By pooling expertise and leveraging risk-sharing mechanisms, the IDB and EIB aim to create more bankable projects attractive to global investors.
3. Deepening System-Wide Collaboration
The partnership extends beyond financing to include institutional alignment, including:
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Exposure exchange agreements to manage financial risks across portfolios
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Expansion of mutual reliance not just in procurement, but in environmental, social, and results-based standards
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Staff exchanges between institutions to encourage cross-pollination of knowledge and promote operational coherence
This level of integration will enhance efficiency, reduce duplication, and enable more agile responses to regional needs.
4. Aligning EU Resources with LAC Development Priorities
A key ambition is to ensure that EU development instruments, such as the Global Gateway, directly support national and regional priorities in Latin America and the Caribbean. The agreement promotes:
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Strategic planning of financing pipelines
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Country-level engagement to map local needs
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Maximization of EU budgetary and technical resources to create meaningful results
Statements from Leadership: A Unified Front
IDB President Ilan Goldfajn underscored the significance of the agreement: “This agreement demonstrates what multilateral development banks can achieve when they act in a coordinated manner: aligning instruments, mobilizing capital, and accelerating results. With the EIB, we are also strengthening ties between Europe and Latin America and the Caribbean, while generating impact on the ground.”
EIB President Nadia Calviño echoed the sentiment: “Europe stands with Latin America and the Caribbean. With this agreement, we are reinforcing our strategic partnership, which is key to the development of our projects and to achieving greater impact on the ground.”
These remarks reflect not only institutional cooperation but also a broader geopolitical objective: to strengthen Europe’s engagement with LAC through development partnerships built on mutual respect and shared values.
Strategic Importance: A Global Gateway in Action
The Global Gateway, the EU’s flagship connectivity and infrastructure initiative, envisions up to €300 billion in global investments by 2027, prioritizing sustainable growth, digitalization, health, education, and climate resilience. The IDB-EIB agreement ensures that this European strategy is contextualized to Latin America and the Caribbean, promoting inclusive economic development, social equity, and environmental sustainability.
This partnership supports the Global Gateway’s dual goal of addressing development needs while enhancing Europe’s global influence through values-driven investment partnerships.
Looking Ahead: A New Development Financing Blueprint
As the global development financing landscape evolves, the IDB-EIB cooperation could serve as a blueprint for future multilateral collaboration. With increasing needs for climate adaptation, digital transformation, and post-pandemic recovery, aligned institutional efforts are no longer optional—they are essential.
The agreement paves the way for future joint operations, deeper knowledge sharing, and greater resource optimization across the LAC region. It exemplifies how multilateral development banks can pool their strengths to meet the complex challenges of the 21st century.
Coordinated Action for Sustainable Progress
Through this landmark agreement, the IDB and EIB have reaffirmed their commitment to delivering smarter, faster, and more impactful development finance to Latin America and the Caribbean. By combining European financial strength with regional expertise, the partnership holds the promise of transforming policy ambition into results that matter for people, planet, and prosperity.
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