#United States #Washington #Private Capital #IDB Invest #Scaling4Impact

IDB Invest Revives Scaling4Impact Securitization Program

IDB Invest, a member of the IDB Group, has recently re-launched its successful securitization program, known as Scaling4Impact, which originally debuted in 2024. The innovative initiative has successfully added over $450 million in funding to the existing goal of $1 billion, a significant milestone that underscores the organization's commitment to mobilizing private capital for sustainable development across the region. This marks the first time a multilateral development bank has resumed a securitization under the 'originate-to-share' model, reinforcing the viability of such financial strategies.

The Significance of Scaling4Impact

In the words of Ilan Goldfajn, President of the IDB Group, "This is an essential step in the business model of IDB Invest's originate-to- share strategy, which is aimed at promoting private-sector-led development." The recent transaction not only signals trust from global investors but also points towards a more replicable approach for multilateral development banks (MDBs) to optimize their balance sheets, thereby opening avenues for further financing.

The new portfolio encompasses diverse sectors such as infrastructure, energy, finance, and corporate enterprises across Latin America and the Caribbean. Notably, the mezzanine tranche of the securitization was acquired by Newmarket Capital, with insurance components provided by AXA XL and AXIS Capital, while IDB Invest retains the senior and junior tranches.

Demonstrating Investor Confidence

James Scriven, CEO of IDB Invest, expressed pride in the initiative's progress, stating, "We have proven that our model works. Returning to market with this new operation highlights the strong investor confidence in the quality and performance of our diversified development assets."

Furthermore, Molly Whitehouse, Portfolio Manager at Newmarket's SRT platform, emphasized the critical role that long-term partnerships play in creating opportunities for market investors to engage in development financing.

Acknowledgements and Awards

The original Scaling4Impact transaction is noteworthy as it represents the first asset securitization from the private sector conducted by MDBs in Latin America and the Caribbean. This groundbreaking initiative has garnered several accolades, including the 2025 IJGlobal Investor Awards for Securitization Deal of the Year in Latin America.

This renewed securitization initiative supports MDB reform efforts prompted by the G20, promoting innovative financing solutions that attract private capital while capitalizing on MDB performance data through the Global Emerging Markets (GEM) database.

Conclusion

In conclusion, IDB Invest's return to the Scaling4Impact program exemplifies a robust mechanism for channeling private investment into development projects. It serves as a beacon of progress, highlighting the synergy between public financial institutions and private investors, and ultimately establishing a framework that fosters sustainable growth in emerging economies. With the guidance of Santander Corporate Investment Banking and Clifford Chance as advisors, the road ahead looks promising for IDB Invest and its stakeholders in the sphere of impact investment.