Increase in Lending

The IDB dramatically increased lending to Latin America and the Caribbean. Approvals programmed for later years were brought forward to provide much needed financing for a wide range of projects such as expansion of conditional cash transfer programs, infrastructure improvements and budget support for governments.

To boost lending in the short-term, the Bank eliminated its policy-based lending authority, increasing lending capacity by $2 billion. The decision brought the IDB in line with other multilateral development banks. In addition, Canada, one of the IDB’s 48 member countries, temporarily increased its “callable” capital by $4 billion, thus increasing the IDB’s lending capacity by an equal amount.

In 2010, the Board of Governor of the IDB began a process to increase the Bank’s capital by a historic $70 billion, which will enable the Bank to lend as much as $12 billion annually, double its pre-crisis levels. The Board agreed on an unprecedented relief package for Haiti, which include cancelling all the country’s debt to the Bank and making more than $2 billion in grants over the next decade.

The IDB approved $15.5 billion in loans and guarantees in 2009, a 38 percent increase over 2008 approvals. Disbursements rose to $11.8 billion from $7.6 billion in the previous year. Grant approvals, including technical assistance and investments, reached $480 million in 2009. Haiti, which since 2007 only receives grants from the IDB, obtained a record $154 milllion of grants.

In 2008, the bank had approved a record $11.2 billion in new financing, an 18 percent increase from a year earlier.

The poorest nations in the region are receiving special attention from the IDB during the crisis. In May of 2009, the Bank increased concessionary funds available for Bolivia, Guyana, Honduras and Nicaragua, allowing for lending to expand to the four nations by 39 percent during 2009 and 2010, to $485 million per year.