SECO Cooperation│The Inter-American Development Bank

The Inter-American Development Bank (IDB) is the largest multilateral source of financing for development projects in Latin America and the Caribbean. It works to reduce poverty and inequalities and to promote sustainable economic growth in the region.

Switzerland is an active member in the governing bodies of the IDB and carries out development projects together with the Bank.

Switzerland hosted the meeting of Representatives of Non-regional IDB Member Countries in January 2020 in Zürich-Rüschlikon, Switzerland.

Role and actitivies of the IDB

The IDB is the most important multilateral source of financing in the region, especially for small and vulnerable countries of Latin America and the Caribbean (LAC). The IDB offers support through the provision of credits and grants, as well as by offering its expertise through technical support. The IDB’s objectives are the following:

Reducing poverty and social inequalities,
Addressing the needs of small and vulnerable countries,
Fostering private sector development,
Addressing climate change by promoting renewable energy and environmental sustainability, and
Promoting regional cooperation and integration.

The IDB Group (IDBG) includes the following organizations, focusing on private sector development:

IDB Invest (formerly named «Inter-American Investment Corporation - IIC»): support to small and medium-sized enterprises.
IDB Lab (Multilateral Investment Fund (MIF)): innovation lab for the IDB Group, it conducts high-risk experiments to test new models for engaging and inspiring the private sector (micro and small enterprises) to solve economic development problems in LAC.

IDB at a glance

Establishment: 1959
Headquarter: Washington D.C., USA
President: Ilan Goldfajn (Brazil)
Member Countries: 48, divided into 14 constituencies
Borrowing Countries: 26 (LAC countries)
Capital: US$ 180 billion (2021)
Annual Lending: IDB: US$ 14 billion, IDB Invest: US$ 6.3 billion (2021)
Swiss Membership: 1975
Swiss Representation: Along with six other countries, member of a constituency that has a seat on the Board

Cities Multidonor Trustfund

Urbanization is taking place at a very fast pace in LAC. This has created opportunities for millions of people, but has also created immense challenges for governments in terms of delivering basic services, guaranteeing adequate levels of quality of life, promoting job creation and protecting the environment (SDG 11). SECO co-finances the IDB Cities Multidonor Trust Fund. The trust fund supports the cities of the LAC region on their way to becoming sustainable, resource-efficient, liveable and prosperous urban centers. Its objective is to support emerging cities of the region in the identification, prioritization, and execution of priority actions that will lead them to sustainable and integrated city development.

Improving Water Supply and Sanitation

Switzerland is the largest donor to the AquaFund with over US$ 18 million. This is the most important instrument of the IDB for facilitating investments that increase sustainable access to water and sanitation infrastructure (SDG 6). The fund also helps the countries of operation to address new challenges presented by climate change, the rapid degradation of freshwater ecosystems and increasing water insecurity. Current investments supported by the AquaFund will improve access to new or improved water supplies, sanitation, wastewater treatment and sanitary landfills (solid waste) for over 1 million households. Switzerland’s longstanding financial and technical contributions have allowed the AquaFund to establishing itself as a model within the IDB in terms of monitoring, reporting and governance. The project also allowed involving Swiss consultants and companies. SECO contributes to the IDB's Source of Innovation Programme, which promotes innovation in the water sector in the LAC region.

Cooperation between Switzerland and the IDB helps to improving water, sanitation and solid waste infrastructure for over one million households.

Switzerland and the IDB

The IDB is a key partner for Switzerland in its efforts to reduce poverty and foster environment-friendly, sustainable growth in LAC. Switzerland is part of a constituency – together with Belgium, China, Germany, Israel, Italy and the Netherlands – that occupies a seat in the Board of Directors. Switzerland participates actively in the discussions and decisions of the Board of Directors and thereby fulfills its supervisory role as a shareholder.

Switzerland’s objectives for cooperation with IDB

In addition to the institutional cooperation within the Board of Directors, Switzerland and the IDB are working together operationally, in particular on the following goals:

Strengthen IDB’s capacities in the water sector and in urbanization (SDG 6, 11).
Strengthen IDB’s capacities in the field of reducing poverty with a focus on inequalities, fragility and gender issues (SDG 1, 5, 10).
Foster economic and social development through strengthening of the private sector (SDG 8, 9).

For the middle term, Switzerland will pursue its efforts to further make the Bank a more results-oriented and effective institution, with the following objectives: