By SC Admin

IDB August 15, 2006...New business model will permit lending to private, state-owned and mixed capital companies without sovereign guarantees in all economic sectors. The Inter-American Development Bank has adopted guidelines that will permit an unprecedented expansion of its lending program.

New lines of business will include lending to private companies in previously restricted economic sectors and to sub-national public entities without sovereign guarantees.

In the past, the Bank's policies constrained its ability to lend directly to municipalities, provinces and state-owned and mixed capital enterprises, for projects that were not backed by a sovereign guarantee. Likewise, the IDB's Private Sector Department was limited to lending in infrastructure, capital markets and trade financing.

A decision by the Bank's Board of Governors at the IDB's Annual Meeting in April in Belo Horizonte, Brazil, lifted these restrictions. The guidelines approved last week enable the IDB to lend directly to companies active in all sectors, including oil and gas, agribusiness, mining, manufacturing, tourism, technology and services, among others.

The guidelines also allow the Bank to meet the growing demand for credit among sub-national entities that have been strengthened by the decentralization that has swept Latin America and the Caribbean in the past two decades. Many of these municipal and provincial governments are now actively seeking financing for projects to improve basic infrastructure in areas such as water, sanitation, electricity, roads and transportation - often in partnership with the private sector.

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Posted by pichu at August 15, 2006 9:45 PM