IDB Group and Japan Expand Cooperation to $4 Billion for Economic, Social and Climate Initiatives
January 23, 2024
The Inter-American Development Bank Group (IDB Group) and the Japan International Cooperation Agency (JICA) signed a memorandum of collaboration to increase co-financing by $1 billion under the Cooperation for Economic Recovery and Social Inclusion (CORE) program. The increase will expand the program’s funding to $4 billion and extends its period until December 2028, renewing the longstanding partnership between the IDB Group and the Japanese government.
The new expansion of CORE will substantially boost the funds available for co-financing and co-investment opportunities in quality infrastructure, disaster-risk reduction, universal health coverage, poverty alleviation and climate change initiatives.
Established in 2011, CORE was initially funded with $1 billion in commitments from JICA, aiming to enhance renewable energy and energy efficiency in Central America and the Caribbean. Since then, the program has tripled its funding and broadened its sectorial and geographical focus to encompass the entire Latin America and Caribbean region.
“We are thrilled about the expansion of the CORE program, a cornerstone of our partnership with the government of Japan and JICA. This co-financing partnership has been a very effective and innovative way through which we can meet the needs of our region. This new chapter will only make it stronger,” said IDB President Ilan Goldfajn.
“The partnership with the IDB Group is of great significance for JICA. We are very pleased and honored to sign this Memorandum for the expansion of CORE, which allows us to provide co-financing resources to the region, increasing the target amount to $4 billion. We will continue to contribute to further recovery and growth of the region by deepening our collaboration with the IDB Group,” said JICA President Tanaka Akihiko.
Examples of the diverse projects that CORE has enabled include promoting access to efficient, sustainable electricity service in rural and isolated areas in Nicaragua. In Paraguay, an operation co-financed with JICA provides safe and efficient water and sewage services in Ciudad del Este, the second largest metropolitan area in Paraguay. Living conditions in this region have been improved by installing and renovating energy-efficient water and sewage facilities.
Furthermore, under the CORE framework, collaboration with both IDB Invest and IDB Lab has also been promoted. For instance, JICA and IDB Invest co-invested over $20 million in Dr. Consulta, a Brazilian health-tech company, marking JICA’s first equity investment in Latin America and the Caribbean. Additionally, JICA collaborated with IDB Lab by co-financing ABACO, one of Peru’s largest cooperatives founded by Japanese descendants and the first private sector overseas investment financing project of JICA in Peru. The collaboration between IDB Lab and JICA also includes the TSUBASA Program, which aims to support Japanese startups aiming to tackle the development agenda in the region. A total of 19 applicants (8 in TSUBASA 2021 edition and 11 in TSUBASA 2022 edition ) were selected for acceleration assistance in matching with potential local partners and creating business plans.
IDB President Ilan Goldfajn and JICA President Tanaka Akihiko during signature of memorandum of collaboration to increase co-financing.