#USA #Washington #Securitization #IDB Invest #Scaling4Impact

IDB Invest Strengthens Its Securitization Model

In a significant development, IDB Invest, a pivotal member of the IDB Group, has made waves in the financial world by augmenting its impressive $1 billion Scaling4Impact securitization with an additional $450 million. This endeavor, launched in 2024, is not just a financial maneuver; it represents the first retap of a securitization under the originate-to-share model from a multilateral development bank.

Mobilizing Private Capital for Development

The transaction highlights the potential for securitizations to act as a sustainable method for multilateral development banks (MDBs) to leverage their balance sheets effectively, attracting private investment to stimulate development initiatives. Ilan Goldfajn, President of IDB Group, emphasizes the importance of this step, stating that it enhances the IDB Invest+ originate-to-share business model, aligning with IDB Group's IDBStrategy+ aimed at driving private sector-led development.

By connecting global investors to impactful projects, IDB Invest is paving new paths that enable a scalable approach to mobilizing necessary private capital for various development ventures across the region.

A Diverse Portfolio Across Latin America and the Caribbean

The expanded portfolio encompasses a range of critical sectors, including infrastructure, energy, financial institutions, and corporate businesses throughout Latin America and the Caribbean. Notably, the mezzanine tranche of the securitization was acquired by Newmarket Capital, with portions covered by the insurance of AXA XL and AXIS Capital, while IDB Invest retains the senior and junior tranche positions.

James Scriven, CEO of IDB Invest, expressed confidence in the performance and quality of their diverse range of development assets, stating, "We've demonstrated that our model works." This second round of investments underscores the strong confidence from investors in the quality of IDB Invest's offerings.

The Power of Long-term Partnerships

Molly Whitehouse, the managing director and co-founder of Newmarket, highlighted the significance of this transaction, viewing it as a testament to the critical role of long-term partnerships in melding private market interests with development finance. She pointed out that the expanded Scaling4Impact transaction epitomizes a new opportunity for private investors to engage effectively in development initiatives.

Originally, the Scaling4Impact transaction marked a landmark achievement as the first securitization of MDB private-sector assets within Latin America and the Caribbean and has already garnered accolades, including the IJGlobal Investor Awards 2025 for Securitization Deal of the Year. This recognition strongly reinforces the validity and innovative nature of the IDB Invest strategy in promoting sustainable private capital engagement in development projects.

Advancing MDB Reforms

The current retap aligns with the broader G20-endorsed reforms aimed at multilateral development banks, emphasizing financial innovations that attract private capital, enhance balance sheet management, and utilize MDB performance data through the Global Emerging Markets (GEMs) database. Financial institutions, including Santander Corporate Investment Banking and Clifford Chance, provided their expertise as advisors during this transformative process.

The enhanced securitization model employed by IDB Invest not only seeks to optimize financial resources but also aims to significantly contribute towards fulfilling developmental goals across the Latin American and Caribbean regions. The success of this initiative showcases how collaborative efforts between MDBs and private investors can create more significant avenues for growth, ultimately impacting society positively.

As IDB Invest forges ahead with its impactful strategies, the finance world eagerly watches how these innovative frameworks will unfold and potentially reshape development finance paradigms.