Narayan AmmachchiThe Japanese government has pledged US$1 billion to support the Inter-American Development Bank’s (IDB) initiatives aimed at stimulating private sector investment in socioeconomic projects in Latin America and the Caribbean.
The Japan International Cooperation Agency (JICA), akin to the United States Agency for International Development (USAID), has also announced plans to contribute an additional $500 million over the next three years.
These funds will be channeled through IDB Invest, a subsidiary of the international lender, which follows an “originate-to-share” model. This approach encourages private sector participation in infrastructure projects, such as electric vehicle manufacturing and solar farms.
According to JICA, Latin America is striving to meet 169 Sustainable Development Goals (SDGs) as outlined by the United Nations, but a persistent financing gap means that only 30 of these targets are likely to be achieved by 2030.
Other IDB entities, including IDBimpact and IDB Lab, will also be involved in this initiative to mobilize private sector investments.
“This $1 billion fund marks a historic milestone. By combining our resources and expertise, we are poised to drive transformative change,” said IDB President Ilan Goldfajn.
Japan has been a longstanding financial partner in the socio-economic development of Latin America, co-financing projects worth $4 billion in 2024 alone. However, this marks the first time that JICA is collaborating directly with IDB Invest.
The announcement comes amid a shift in U.S. policy, as USAID has significantly reduced funding for previously committed projects in Latin America.
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