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IDB Invest Strengthens Development Financing with New Securitization

In a significant move for development finance, IDB Invest, a member of the IDB Group, has recently enhanced its $1 billion Scaling4Impact securitization by adding $450 million. This strategic reinvestment marks the first reissue under the originate-to-share model by a multilateral development bank, aimed at mobilizing private capital for developmental purposes.

The Scaling4Impact securitization, which was originally launched in 2024, serves as a clear indication that securitizations can be effectively used by multilateral development banks (MDBs) to optimize their balance sheets, attract private investments, and create more room for increased lending. According to Ilan Goldfajn, President of the IDB Group, this initiative paves the way for better scalability in mobilizing private funds for development projects.

The newly expanded portfolio focuses on various sectors including infrastructure, energy, and financial institutions throughout Latin America and the Caribbean. The Mezzanine tranche, crucial in the structure of this securitization, was acquired by Newmarket Capital and features guarantee contracts backed by AXA XL and AXIS Capital, while IDB Invest retains control over the senior and subordinated tranches. This reflects a robust structure that enhances investor confidence.

James Scriven, CEO of IDB Invest, stated, "We have demonstrated that our model works effectively, and this return to market with a retap showcases the strong trust our investors place in the quality and performance of our diversified development assets."

The reinforcing of the initial Scaling4Impact transaction is not just about numbers; it signifies the importance of long-term partnerships in creating new avenues for private investors to engage in development financing. Molly Whitehouse, a portfolio manager at Newmarket, expressed her enthusiasm for this extension, highlighting how crucial SRT transactions have been in assisting multilateral agencies in broadening their lending capabilities.

Notably, the original Scaling4Impact transaction was awarded several accolades, including the prestigious 'Securitization Deal of the Year' for Latin America at the IJGlobal Investor Awards 2025. This recognition underscores the significance of innovative financial solutions in driving development initiatives.

In alignment with global financial trends, the initiative also supports the G20-endorsed MDB reforms by promoting financial innovations, attracting private capital, and leveraging MDB performance data through the Global Emerging Markets (GEMs) database. Advisors for the transaction included Santander Corporate Investment Banking and Clifford Chance, ensuring comprehensive support throughout the process.

As IDB Invest continues to evolve its models and attract investment, it stands as a leader in the sector, instilling confidence in the potential of development finance to contribute to a more equitable and prosperous future globally. The continued success of the Scaling4Impact securitization is a testament to IDB Invest’s commitment to fostering sustainable development through innovative financing mechanisms.