Resources for projects to cut trade, transport and logistics costs in Latin America and the Caribbean
The Inter-American Development Bank (IDB) today announced it has received $20 million in contributions and pledges from Canada, Mexico, Spain and the United States to a trust fund that will support projects designed to reduce cross-border trade, transport and logistics costs and expand trade in Latin America and the Caribbean.
By IDB estimates, trade within this region is still far below its potential due to insufficient regional infrastructure, trade facilitation measures and trade regulatory architecture. Cross-border projects could help lower those transaction costs, boost export capacity and lead to a better distribution of trade benefits.
In order to promote such projects and leverage its traditional lending with innovative financing mechanisms, the IDB established a multi-donor integration fund that complements its Fund for Integration Infrastructure (FIRII) for preparation of infrastructure project.
Doubling its original pledge, Canada has contributed CDN $10 million to the new window. The United States has fulfilled its pledge of $5 million and Spain added $2 million. Mexico has pledged $3 million and Colombia has expressed interest in contributing, marking the first time borrowing member countries participate in an IDB-managed multi-donor trust fund.
These resources will enable the IDB to provide Latin American and Caribbean countries incentives to invest in cross-border projects and leverage loans, lowering overall project costs. The Bank will work with governments in the region to identify priority projects, with an emphasis on Central America and the Caribbean.
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