IDB's Moreno confident US congress will approve record capital increase

- Monday, March 28, 2011

IDB's Moreno confident US congress will approve record capital increase

IDB is confident that the US congress will approve the bank's US$70bn capital increase despite the country's ongoing budget challenges, IDB president Luis Alberto Moreno told BNamericas on the sidelines of the multilateral's annual meeting, being held in Calgary.

On July 21, 2010, IDB's board of governors agreed to the terms of the largest expansion of resources in the bank's history and the replenishment of US$479mn for the Fund for Special Operations (FSO), which provides loans to the poorest nations of Latin America and the Caribbean.

To implement the agreement, the legislature in each member country must approve the funding proposal before October 31, although IDB's board of executive directors may extend the deadline.

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"The issue has been debated in the US, but the important thing is that treasury secretary Tim Geithner has said here in Calgary and in congress over the last few weeks that the US government will honor its commitment with the IDB. And I'm sure that is the way it's going to be," Moreno said.

The US is IDB's largest shareholder, accounting for 30% of the bank's total votes.

The capitalization is key to expanding IDB's lending capacity to US$12bn annually over the next few years, compared with the US$7.4bn average it disbursed in 1994-2008, Moreno said.

IDB approved US$12.1bn in new financial operations in 2010 and made loan disbursements of US$10.3bn, according to its latest annual report, issued March 28. The bank's operating income was US$1.25bn last year.

To read the IDB's annual report, go to this link