Inter-American Development Bank and Japan International Cooperation Agency Announce Historic Partnership
The Inter-American Development Bank (IDB) has announced a historic partnership with the Japan International Cooperation Agency (JICA) to establish the JICA Trust Fund Achieving Development of Latin America and the Caribbean (TADAC). This new partnership marks a significant milestone in the collaboration between the IDB and JICA, with a US$1 billion contribution from JICA to establish the TADAC Fund.
About the TADAC Fund
The IDB, a Washington-based financial institution, has said that the TADAC Fund aims to catalyze greater private investment by co-financing projects that drive sustainable growth. The fund will provide IDB Invest with additional resources, streamline co-financing with JICA by reducing duplication, and leverage IDB Invest’s expertise. Additionally, the fund can expand to US$1.5 billion after three years, subject to mutual agreement.
IDB’s New Approach
The IDB has adopted an "originate-to-share" business model, emphasizing collaboration and co-financing with other development institutions to mobilize private investment and maximize capital efficiency. The TADAC Fund will further strengthen these efforts.
IDB’s Partnership with JICA
The IDB and JICA have been partners for over 40 years, with JICA being the IDB’s largest bilateral aid agency. In 2011, the two organizations formalized their partnership through a co-financing agreement, which later evolved into the Cooperation for Economic Recovery and Social Inclusion (CORE) framework. In 2024, JICA expanded CORE’s funding to US$4 billion, significantly increasing resources for co-financing and co-investment in key areas.
Key Initiatives
The IDB and JICA have collaborated on several key initiatives, including the Dr. Consulta, a Brazilian health-tech company, and the TSUBASA Program, which supports Japanese startups tackling regional development challenges.
Conclusion
This historic partnership between the IDB and JICA marks a significant milestone in the region’s development, with the potential to drive transformative change across Latin America and the Caribbean. The TADAC Fund will not only catalyze private investment but also foster sustainable development, innovation, and economic growth in the region.
FAQs
Q: What is the purpose of the TADAC Fund?
A: The TADAC Fund aims to catalyze greater private investment by co-financing projects that drive sustainable growth.
Q: What is the size of the TADAC Fund?
A: The TADAC Fund is initially established with a US$1 billion contribution from JICA, with the potential to expand to US$1.5 billion after three years.
Q: What is the significance of this partnership between the IDB and JICA?
A: This partnership marks a significant milestone in the region’s development, with the potential to drive transformative change across Latin America and the Caribbean.
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