Ninth Capital Increase

In the 15 years since the Eighth General Increase in the Resources of the Bank (IDB-8), the IDB has become the main source of development finance for the Latin American and Caribbean region, with loan approvals of $108.6 billion. From 2007 onwards, amid the global economic crisis, lending has increased sharply.

The Bank kept pace with the development demands of the region through the increase in lending volume permitted by IDB-8. Nevertheless, the increase in those demands has prompted a review of the Bank’s own capital needs. Management and shareholders are discussing the constraints on the IDB’s ability to respond to borrowers’ needs in 2010 and beyond.

In March 2009, at the Bank's Annual Meeting in Medellín, the Board of Governors called unanimously for Management to begin a review of the need for a general capital increase of the Ordinary Capital and replenishment of the Fund for Special Operations. In addition, a Committee of the Board of Governors was formed, which convened a meeting in Santiago, Chile, on July 2, 2009. The Governors considered a first working paper with five components:

• A review of the Bank’s development contribution to the region from the beginning of the Bank’s previous general capital increase (IDB-8) in 1994 though 2008
• A description of the main challenges facing the region from the present until 2020
• A discussion of the Bank’s comparative advantages as a regional development institution
• An analysis of the demand for IDB resources and
• An agenda for enhancing the Bank’s relevance as a development partner

The Governors met again in Madrid on October 8, 2009. They praised the Bank’s progress in the steps to improve development effectiveness and accountability, and agreed to move ahead with the final phase of their review of the Bank’s need for a general capital increase.

They agreed to focus on five areas in the next phase:

• The Bank's appropriate size and specific mandates going forward
• Its institutional reforms and a timetable for their implementation
• Its private sector lending policies
• Its concessional support for the poorest and most vulnerable people in the region and
• How the IDB allocates its income

The Governors resolved to complete their review of the Bank's analysis of development needs in Latin America and the Caribbean and the Bank's ongoing institutional reforms by their next annual meeting in Cancún, Mexico, in March 2010.

In addition, as part of the review of the need for what would be the Ninth General Capital Increase, the Bank’s Board of Executive Directors approved a public consultation plan on September 2, 2009. The plan provides for disclosure of a number of documents related to that process and then conduct a public consultation. This web page and the web page regarding the public consultation will be updated as further documents and information related to the review become available.