Nine years ago, IDB Invest was “recreated” with the intent to place more focus on the Caribbean.
IDB Invest is a private sector arm of the Inter-American Development Bank (IDB), which operates as a group in 26 countries in Latin American and Caribbean.
Typically geared toward developmental projects, the IDB primarily works with governments to achieve its goals.
However, last year the Washington DC-based IDB increased its investment in the region.
CEO of IDB Invest, James Scriven, told the Business Guardian in an interview on Microsoft Teams on Tuesday, that the IDB Invest’s impact in the Caribbean had grown over that nine-year period with investments increasing from US$50 to US$60 million a year to over US$1 billion last year.
There are indicators that investments may increase even further this year.
“We do US$10 billion a year (in investments) across the 26 countries, and last year, we did 13 per cent of our investments over the entire continent in the Caribbean countries. And that’s about US$1.2 billion to US$1.3 billion. Our shareholders have requested that we do at least 10 per cent of our business in the nine Caribbean countries who are shareholders of IDB invest. This year, for the first time in our history, we went beyond our 10 per cent mandate and we did 13 per cent. In Trinidad, we have a long-standing relationship with private sector companies across many financial institutions and conglomerates,” said Scriven.
Scriven was appointed CEO of IDB Invest nine years ago, having previously done work in Caribbean as part of the International Finance Corporation, where he worked for 15 years.
The IDB has 48 shareholders/member countries who inject capital which the institution leverages through issuances in local and international capital markets. T&T, Scriven said, is an important shareholder of the IDB.
Last month, IDB Invest agreed to a US$150 million deal with Massy Holdings. Scriven confirmed that it was the single, largest deal IDB Invest had done in the Caribbean to date.
“The largest deal that we have actually done is the Massy transaction. As I said, it’s a US$150 million deal with Massy Holdings and Massy Integrated Retail. This covers Trinidad, Barbados and Jamaica. It’s a package that does US$90 million of long-term funding to upgrade capital expenditure, boosting a strategic expansion plan and US$60 million of trade finance programmes to enhance intra-regional trade and supply chain platforms. And, as I said, it covers a number of countries. Its main activity is in Trinidad, but it also covers Barbados, Jamaica and expanding into places like Colombia,” he explained.
Another significant deal done in Trinidad related to the provision of housing as IDB Invest facilitated a TT$300 million bond issued by Home Mortgage Bank for housing in Trinidad and Tobago.
Scriven said IDB Invest is of the view that there is significant potential in the Caribbean, but emphasised the need to upgrade physical infrastructure to make it more resilient to natural disasters. He added the institution is also placing focus on renewable energy, agribusiness, and tourism development.
IDB Invest has invested about US$500 million annually in digital infrastructure to provide internet access in Latin America and the Caribbean with Scriven stating it had made a significant investment in Guyana to expand digitalisation.
Scriven said the organisation has also been working to increase its presence in the Caribbean.
“Eight, nine years ago, the governors decided to put at the top of our priority list the nine Caribbean countries that we consider as small island countries. We call them SNIs internally. It was a decision taken that we would significantly increase our physical presence and our involvement in the Caribbean. We went from having one person working in the Caribbean, to now when we have more than 10 people,” said Scriven, explaining there are plans to have 25 people in the region in the next three to four years.
Part of this adjustment, he explained, included bringing the IDB Invest general manager to Trinidad.
“I’d like to reinforce the idea of how important the Caribbean is for IDB invest and the IDB group, and that’s why, in particular, we decided to have our most senior professional covering the Caribbean, and that person will be announced in the next few weeks. He or she will be based in Port-of-Spain and covering the entire Caribbean for us,” said Scriven.
“We do have a presence of IDB, a general manager in Jamaica. We have decided to have (that person) in Port-of-Spain, the presence of the general manager of IDB and best private sector for the Caribbean. So the senior head of the Caribbean will be based in Trinidad and we are in the process of recruiting that person.”
In particular, Scriven said he had particular interest in the development of Tobago as an international tourism destination.
He said, “A big focus that I personally have is to help develop Tobago as an international tourism destination, and we’re in deep discussions to see if that could happen in the near term.”
Scriven acknowledged that tourism continued to play a major role in the development of the Caribbean and IDB Invest was aiming to bolster the sector.
“We understand the important role that tourism plays, directly and indirectly in job creation and supply chains within each of the countries. And that’s another big sector for us.”
Scriven said IDB Invest would largely focus on industries such as infrastructure and energy, the corporate sector and the financial sector.
“We are very involved in investing in ports, airports, roads, any form of transport and logistics. There are large investments that we’re doing. And secondly, and related to that, in the energy sector, we do a lot of renewable energy to supply reliable and cheap sources, or cheaper sources of funding for energy, mainly in the renewable energy space. So that’s infrastructure and energy in the corporate sector.
“We do have a large focus on agribusiness and tourism. In agribusiness, we are in preparing countries to substitute imports. As you know, in the Caribbean, a large percentage of food is imported, and our idea is working locally to be able to produce locally. And that’s our agribusiness sector and the tourism sector,” said Scriven.