The Inter-American Development Bank (IDB) and the European Investment Bank (EIB) renewed yesterday their commitment to cooperate and co-finance projects that contribute to the economic and social development of Latin America and the Caribbean.

The two institutions signed a memorandum of understanding that will allow them to combine the EIB's financial strength and its private sector orientation with the IDB's political reach and coverage of Latin America and the Caribbean and its capacity to identify and implement projects with both public and private partners.

Both institutions, which are also jointly exploring possibilities to attract private investment to the region, plan to co-finance energy and transport projects next year. President, Luis Alberto Moreno, and Vice-president, Carlos da Silva Costa, signed the agreement in Lisbon, during the XIX Ibero-American Summit.

This partnership allows both institutions to continue supporting economic growth, build infrastructure with a solid environmental focus, foster private sector development and create employment opportunities in Latin America and the Caribbean.

The new agreement renews commitments from both institutions that were set in a previous memorandum of understanding, signed in December 2004, which expires at end of this year. Under the previous accord, the IDB and EIB have co-financed important projects for the region, including the expansion of the Panama Canal and Nicaragua’s power sector rehabilitation program.

The EIB, established in 1958 by the Treaty of Rome, finances capital investment projects that further the European Union (EU) policy objectives. It also participates in the implementation of the EU's co-operation policy towards third countries. Financing in Latin America is carried out under the ALA  IV mandate from the EU, to finance operations that support the EU presence in those regions through Foreign Direct Investment, transfer of technology and know-how, or contribute to environmental sustainability.

In the Caribbean, the Bank’s activities are carried out under the provisions of the Investment Facility, set up by the ACP -EU Partnership Agreement, which not only provides for financing in the form of loans but also grant aid from the EU member states. The Investment Facility aims at supporting technically, environmentally, financially and economically sound projects in the private or the commercially run public sector.

The Inter-American Development Bank (IDB) is an international organization established in 1959 to promote the economic and social development of its member countries. IDB has become the largest multilateral lender in Latin America and the Caribbean and a key provider of non-reimbursable technical assistance.