Catalysing Sustainable Infrastructure Growth in Latin America and the Caribbean
In a region brimming with potential yet hampered by infrastructure gaps, a new partnership is quietly reshaping the future of development finance. The Inter-American Development Bank Group (IDB Group) and the OPEC Fund for International Development have unveiled a 3 million dollar facility designed to build a pipeline of high-quality, co-financing-ready infrastructure projects across Latin America and the Caribbean.
Announced in Riyadh on the sidelines of the 9th Future Investment Initiative, the agreement was formalised by IDB Group President Ilan Goldfajn and OPEC Fund President Abdulhamid Alkhalifa. It marks a significant milestone in a growing collaboration that aims to mobilise resources, accelerate sustainable development, and support stronger regional integration.
The initiative builds on a memorandum of understanding signed in Washington in April 2025, signalling a maturing alliance between two heavyweight development institutions with shared ambitions to lift economies, strengthen communities, and improve lives across the region.
Preparing the ground for billions in future investment
At the heart of the new partnership lies a clear and ambitious mission: to ensure infrastructure projects are ready to attract large-scale project finance investment. The IDB-OPEC Fund Project Preparation Facility, administered by the IDB, will support technical cooperation across 24 eligible countries in Latin America and the Caribbean.
By zeroing in on pre-investment activities such as feasibility studies, project structuring, safeguards, and procurement planning, the facility aims to unlock over 400 million dollars in investment over the next five years. That is not simply a funding programme; it is a catalyst for long-term, sustainable growth.
Priority sectors include:
- Transport
- Renewable energy
- Water and sanitation
- Digital infrastructure
- Social services
IDB Group President Ilan Goldfajn offered a compelling assessment: “This facility is a bridge between vision and co-financing-ready projects.” He continued: “This partnership combines the IDB’s deep regional expertise with the OPEC Fund’s global reach to prepare a strong pipeline of projects.”
Meanwhile, OPEC Fund President Abdulhamid Alkhalifa highlighted the strategic impact: “Together with the IDB Group, we are strengthening the foundation for future investment and sustainable growth across Latin America and the Caribbean. By supporting well-prepared, high-impact projects, this new facility will help channel more resources where they can make a lasting difference.”
Tapping into a global push for sustainable development
This collaboration arrives at a pivotal moment for the region. According to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), regional infrastructure investment needs to reach at least 5 percent of GDP annually to meet sustainable development goals, yet current levels typically fall far short.
By enhancing design and technical readiness, the facility supports a shift toward evidence-based planning, transparency, and improved execution. Crucially, it also plays into broader global initiatives, including the G20’s focus on sustainable infrastructure and multilateral co-financing principles.
Two powerful components driving change
The facility operates through two primary mechanisms, each geared toward strengthening the investment pipeline:
1. Project Design and Implementation
Funding will support:
- Feasibility studies and demand analysis
- Legal reviews and institutional planning
- Monitoring and evaluation systems
- Compliance with international environmental and social standards
2. Institutional Strengthening
Technical support will focus on building regional capacity through:
- Regulatory and governance improvements
- Enhanced digital tools for project planning
- Risk management and procurement systems
This dual approach ensures countries are equipped not only with bankable projects but also with the institutional muscle to deliver them effectively.
A long-term partnership built on shared goals
The IDB Group remains the largest source of development financing in Latin America and the Caribbean, delivering impact through its public-sector arm IDB, private-sector champion IDB Invest, and innovation laboratory IDB Lab.
The OPEC Fund, meanwhile, holds a unique mandate as the only development agency providing financing from member to non-member countries exclusively. Established in 1976, it has committed more than 30 billion dollars to projects in over 125 nations. With a AA+ credit rating and strong institutional stability, it brings significant capacity and credibility to the alliance.
A region poised for infrastructure transformation
Latin America and the Caribbean stand at a crossroads. Rapid urbanisation, climate vulnerability, and digital ambition are combining to create both immense needs and unprecedented opportunities. Countries are accelerating investment in clean energy, expanding resilient transport corridors, modernising water systems, and connecting remote communities.
Yet without robust project preparation frameworks, too many promising concepts stall before funding or execution. That gap is precisely what the IDB-OPEC Fund Facility seeks to fill.
Recent estimates from the World Bank and IDB suggest the region loses between 20 and 40 percent of potential infrastructure value due to inefficiencies, delays, and planning gaps. Strengthening preparation is a proven route to unlocking finance and improving delivery.
This agreement is more than a funding announcement. It signals a decisive move toward smarter, more inclusive, and better‑prepared infrastructure development across the region.
As economies rebuild momentum and global investors increasingly prioritise sustainability, Latin America and the Caribbean are positioning themselves to capitalise on international interest and drive meaningful local impact.
Building resilient and inclusive futures
Boosting project readiness may not always generate headlines, but its impact is unmistakable. Thoughtfully prepared infrastructure programmes create the conditions for jobs, connectivity, sustainable energy access, resilient cities, and stronger trade.
This strategic collaboration stands to deliver precisely that. With strengthened institutions, improved planning tools, and a clear path to mobilising investment, the region is better equipped to tackle its infrastructure challenges and seize emerging opportunities.
A stronger platform for lasting growth
The message is clear. With aligned priorities, patient investment, and a shared commitment to sustainable development, the IDB Group and OPEC Fund are laying foundations that could transform communities for years to come.
As Latin America and the Caribbean continue to chart their future, well‑prepared infrastructure will remain the beating heart of development and resilience. The new facility represents a timely and powerful vote of confidence in the region’s prospects and its people.
