IDB and OPEC Fund Unite to Boost Development in Latin America and Caribbean

The MoU outlines a dynamic partnership with both sovereign and non-sovereign components, embracing both public and private sector initiatives.

In a move poised to strengthen development efforts across Latin America and the Caribbean (LAC), the Inter-American Development Bank (IDB), its private-sector arm IDB Invest, and the OPEC Fund for International Development (OPEC Fund) have announced a groundbreaking collaboration. Through a newly signed memorandum of understanding (MoU), the three institutions will join forces to co-finance strategic development initiatives, catalyze private-sector investment, and support climate resilience and social infrastructure across the region.

The agreement, signed on April 25, 2025, sets the stage for coordinated investment and knowledge sharing in key sectors such as renewable energy, sustainable agriculture, biodiversity, transportation, resilience and mitigation, and both physical and social infrastructure.

Key Features of the Strategic Framework

The MoU outlines a dynamic partnership with both sovereign and non-sovereign components, embracing both public and private sector initiatives. The pillars of this collaboration include:

• Joint Co-Financing and Parallel Financing: The institutions will work together to identify and structure co-financing opportunities early in the project lifecycle. This applies to both sovereign (government-backed) and non-sovereign operations, streamlining efforts to maximize development impact.

• Technical Assistance Facility: A specialized facility will be created to enhance project preparation and advisory services. For the public sector, this includes feasibility studies and implementation support. For the private sector, the focus will be on strategic advisory, capacity building, and facilitating access to financing.

• Regional Focus with Specific Country Engagements: The institutions are already actively exploring potential joint initiatives in Barbados, Chile, Colombia, Panama, Paraguay, Peru, Mexico, and Uruguay for the 2025–2027 period. These countries represent a cross-section of development challenges and opportunities, making them ideal candidates for pilot programs and scalable impact.

• Integrated Private Sector Approach: IDB Invest and the OPEC Fund will streamline the identification and rollout of pilot projects involving joint technical assistance and blended finance. This alignment is expected to improve execution timelines and resource mobilization for private sector ventures.

Deepening Development Impact Through Shared Knowledge and Innovation

In addition to co-financing, the collaboration emphasizes the importance of information exchange and knowledge sharing. This will include the development of a shared database of development and climate indicators, joint publications, and participation in high-level regional forums and training events.

The institutions also plan temporary staff exchanges, internships, and knowledge missions to bolster cross-institutional learning and long-term cooperation. Special attention will be given to nature-based solutions, a growing area of interest as countries seek to integrate biodiversity and ecological resilience into infrastructure and agricultural planning.

Leaders Reaffirm Commitment to Sustainable Development Goals

Ilan Goldfajn, President of the IDB, emphasized the long-term vision behind the partnership:

“This agreement marks a new step in our partnership with the OPEC Fund. It reflects our continued efforts to deepen our collaboration in exploring and executing co-financing projects in key priority areas for both the public and private sectors in Latin America and the Caribbean, as well as advancing joint technical assistance initiatives.”

OPEC Fund President Abdulhamid Alkhalifa echoed this sentiment, highlighting the potential of shared resources to drive inclusive growth:

“Our partnership with the IDB and IDB Invest reinforces the OPEC Fund’s mission to drive development through collaboration. By pooling resources and expertise, we can deliver tangible results that support climate resilience, inclusive infrastructure, and economic opportunity in Latin America and the Caribbean — and ultimately improve the lives of people across the region.”

Looking Ahead

This agreement not only strengthens multilateral cooperation but also exemplifies how development institutions can synergize their mandates to support countries in addressing interconnected challenges. With pressing regional needs ranging from climate resilience to infrastructure modernization, the IDB–IDB Invest–OPEC Fund alliance presents a powerful tool for unlocking transformative change in the LAC region.

As the framework moves into its implementation phase, stakeholders and observers alike will be watching closely for the emergence of high-impact projects and replicable models that can shape the future of sustainable development.