This historic initiative is the agency's first private sector fund with the IDB and its largest private sector fund in Latin America and the Caribbean.
IDB Invest and the Japan International Cooperation Agency (JICA) announced this Tuesday a contribution of US$ 1 billion by JICA for the creation of the JICA Trust Fund for the Development of Latin America and the Caribbean (Tadac).
This historic initiative is the agency's first private sector fund with the IDB and its largest private sector fund in Latin America and the Caribbean.
Its aim is to catalyse greater private investment by co-financing projects that drive sustainable growth.
In the face of the growing financing gap in the region, IDB Invest, the private sector arm of the Inter-American Development Bank (IDB), is adopting an “Originate-to-Share” business model, which emphasizes collaboration and co-financing with other development institutions to mobilize private investment and optimize capital efficiency. The Tadac Fund will further strengthen these efforts.
In this context, the Tadac Fund will provide IDB Invest with additional resources, facilitate co-financing with JICA by reducing duplications, and leverage IDB Invest's expertise. Furthermore, subject to mutual agreement, the fund has the potential to expand to US$1.5 billion after three years.
"This fund marks a historic milestone in our collaboration with JICA. By leveraging our joint resources and expertise, we are poised to generate transformative change in the region. This initiative will not only catalyze private investment, but will also foster sustainable development, innovation, and economic growth in Latin America and the Caribbean," said IDB President Ilan Goldfajn.
For his part, JICA President Akihiko Tanaka has highlighted the importance of this collaboration, noting that JICA is committed to supporting private sector efforts to address "the deepest social problems in Latin America and the Caribbean."
The creation of Tadac marks a new milestone in the collaboration between the IDB and JICA. For more than 40 years, JICA has been a strategic partner in Latin America and the Caribbean, consolidating its position as the largest bilateral cooperation agency of the IDB.
