IDB engagement with civil society, foundations and philanthropic institutions

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IDB engagement with civil society, foundations
and philanthropic institutions
Luis Alberto Fierro Resource Mobilization Lead
Specialist IDB Office in Europe Como,
Italy November 2010
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Agenda

• Overview of the IDB

• IDB Capital increase
• IDB Realignment
• Reconstruction in Haiti

• Partnerships with the Private Sector

• As a client Diversified menu of financial and
  non-financial services
• As a partner Active stakeholder and essential
  source of experience and know-how
• As consultant/provider of services Contract
  opportunities within projects financed by the IDB
  Group

• Partnerships with Civil Society

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• Overview of the IDB

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Who we are

• The IDB is the oldest and largest of the regional
  multilateral development banks.
• Main source of multilateral financing and
  expertise for sustainable economic, social and
  institutional development in Latin America and
  the Caribbean.
• Provides solutions to development challenges by
  partnering with client governments, companies and
  civil society organizations.
• The IDB produces financial and non-financial
  products for the region as well as funding
  research institutes, through three mechanismsthe
  Bank itself (IDB) the Inter-American Investment
  Corporation (IIC) and the Multilateral Investment
  Fund (MIF).

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How we do it
IDB Group Operations

• Public sector loans with sovereign guarantee
  investment, policy-based and emergency loans
  grants www.iadb.org.
• Private sector loans and guarantees through the
  Structured and Corporate Finance Dept., primarily
  for infrastructure and capital markets projects
  www.iadb.org/scf.
• Expanded mandate loans to sub national entities
  without sovereign guarantee.
• Inter-American Investment Corporation (IIC) SME
  loans lt 10 million www.iic.int. The IIC also
  provides funding to financial institutions that
  serve the small and medium-size corporate market.
• Finpyme Program SME business diagnostic review
  services in Central America and the Caribbean.
• Multilateral Investment Fund (MIF) grants for
  microfinance, training, business regulation and
  deregulation loans and equity funds. Main
  areas Innovation and Knowledge Management
  Business development Access to Finance Social
  Entrepreneurship and Development Effectiveness
• Remittances. www.iadb.org/mif.

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Voting Power / Capital Subscription
Canada
United States
Europe and Israel
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30
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Latin America the Caribbean
Japan, China Rep. of Korea
50
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European contributions to IDB

• The European member countries have much to offer
  to Latin America and the Caribbean, including
  their valuable human capital, and world-class
  technological innovations.
• Some areas in which European nations provide
  leadership are economic, social and environmental
  policies and programs.
• These contributions can be expressed through
  their people, and through the permanent policy
  dialogue held between representatives of the
  public and private sectors with the IDB Group.
• There are about 180 European staff members, which
  is approximately 10 of the total staff. There
  are also secondments from European nations and
  institutions, in areas such as sustainable
  energy, climate change, gender, etc.).
• In addition to their participation in the
  Ordinary Capital ,the Fund for Special
  Operations, the Inter-American Investment
  Corporation, and the Multilateral Investment Fund
  (MIF), European member countries have also
  contributed to single-donor and multi-donor trust
  funds.

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European contributions to IDB

• European multilateral and bilateral financial
  institutions also provide co-finance for IDB
  loans and non-reimbursable grants.
• Some European cofinance partners include the
  European Investment Bank (EIB), the Nordic
  Investment Bank (NIB), the German development
  bank (KfW), the French development agency (AFD),
  the Spanish development agency (AECID), the
  Austrian Development Bank, other members of the
  European Development Finance Institutions (EDFI),
  and other multilateral and bilateral development
  institutions.
• The IDB is participating in the Latin American
  Investment Facility (LAIF) of the European Union,
  which provides incentives for cofinance between
  European and Latin American Financial
  institutions.
• The IDB is participating in the funding from the
  Global Environment Facility (GEF), the Climate
  Investment Funds (CIF), and other global funds.
• 13 countries in Latin America and the Caribbean
  are members of the International Renewable Energy
  Agency, established in Bonn.

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Impact of the financial crisis

• Increasing financial needs from beneficiaries
  countries
• Yearly average of approvals 1999-2008US 6,7
  billion
• Approvals 2009 US 15,5 billion andUS 480
  million in non-reimbursable technical assistance

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Bank's capital increase

• Cancun Declaration March 2010
• Agreement on a US70 billion increase in the
  Ordinary Capital, providing a lending capacity of
  up to US 12 billion a year,
• Agenda for a Better Bank
• Ensuring Development Impact
• Use of the highest standards of transparency
• Social and Environmental Safeguards
• Financial and Risk Management

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A successful realignment launched in 2007

• Decentralized organization, with a greater number
  of staff and decision-makers in Country Offices.
• In 2015, we expect to have transferred 50 of the
  operational capacity in Country Offices.
• Loans approval timing has almost halved (from 12
  to 7 months).
• New measure to increase development effectiveness
  and reduce risks
• Clients with increasing importance local
  governments and private sector

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• Partnership with the Private Sector

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IDB Strategy

• Countercyclical role
• Setting the foundations of long term development
  by partnering with the private sector
• 5 sector pillars

Highest priority

• financial and advisory support for private and
  sub-national clients

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The IDB can provide unique advantages
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Working with the IDB as a source of finance is
similar to working with any bank

• Sponsor Identify and reach out to the
  appropriate window/contact at the IDB Group
  (please note project has to be located in Latin
  America and the Caribbean).
• Sponsor Provide preliminary information to the
  IDB
• Brief project description
• Viable Business and Financial Plan (project cost
  debt equity)
• Company information (nationality track record,
  financial statements)
• Appropriate studies (design feasibility
  environmental and social impact assessments, etc)
• 3. Bank Reviews info

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Working with the IDB as a source of finance is
similar to working with any bank

• Sponsor/Bank negotiate mandate letter (formal
  agreement with the sponsor to conduct due
  diligence).
• Bank conducts due diligence with the support of
  specialized consultants.
• Bank and Sponsor agreement on the term sheet
  (loan conditions suggested by the IDB).
• Bank and Sponsor internal approval by the Bank,
  financial closing and disbursement.

Approximate time 3 to 8 months, depending on the
project
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As a Partner Our Priorities

• Forge new strategic partnerships with corporate
  and family foundations, civil society, individual
  philanthropists, NGOs, and all other potential
  private sector partners.
• Connect interested donors with IDB projects and
  programs as potential financial and non-financial
  contributors.
• Harness the private sectors innovation,
  entrepreneurship, creativity, determination, and
  management skills to achieve developmental goals.
  
• Facilitate and advance the culture of social
  investment philanthropy in LAC, playing a key
  public advocacy and convening role for the
  subject.
• Promote contributions to multi-donor trust funds
  in strategic areas (e.g. climate change,
  renewable energy, knowledge economy, water and
  sanitation, natural disaster prevention, etc.)

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Multi-Donor Trust Funds at the IDB

• Aid for Trade Fund
• Anti-Corruption Trust Fund
• AquaFund (water and sanitation)
• Disaster Prevention Fund
• Food Crisis Response Strategic Thematic Fund
• Gender and Diversity Fund
• Knowledge Economy Fund
• Institutional Capacity Strengthening Fund
• Market Solutions to Mobilize Social Change Fund
• Sustainable Energy and Climate Change Multi-donor
  Fund

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European contributions to Trust Funds

• Multi-donor Trust Funds
• Aid for Trade (Switzerland, UK)
• Anticorruption Fund (Norway)
• Aquafund (Austria)
• Disaster Prevention Fund (Spain)
• Gender and Diversity (Austria, Norway, UK)
• Knowledge Economy (Finland, Spain)
• Market Solutions to Mobilize Social Change
  (Austria)
• Mesoamerican Health (Spain)
• Sust. Energy Climate Change (Germany, Italy,
  Spain, UK)

• Single-donor trust funds
• Danish Trust Fund for Consulting
• Finnish Technical Assistance Fund
• French Technical Cooperation Fund
• Italian Consulting Firms Trust Fund
• Italian Fund for MIF Project Preparation
• Italian F. Microenterprise Development
• Italian Fund for Inf. Comm. Tech.
• Italian Fund for Reg. Competitiveness
• Norwegian Consulting Services
• Portuguese Technical Cooperation Fund
• Spanish Fund for Water and Sanitation
• Span. Social Entrepreneurship Program
• Spanish General Cooperation Fund
• Swedish Fund for Consulting Services
• Swiss Fund for Consulting Services
• UK Markets and Governance for Poverty Reduction
  Fund

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• Partnership with Civil Society

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We partner with

• Public sector strategic bilateral donor
  partnerships which bring new and innovative donor
  development models to the region.
• Private sector foundations Forge new strategic
  partnerships with corporate and family
  foundations to advance development in the region.
• Private sector corporations Advance corporate
  social responsibility in LAC, playing a key
  public advocacy and convening role making CSR
  more strategic.
• Civil Society Organizations on consultations of
  key strategies and policies, and delivery of
  services.

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Our Strategic Initiatives
Sustainable Energy Climate Change 4 pillars (i) renewable energy, (ii) biofuel development, (iii) access to carbon finance, and (iv) adaptation to climate change.
Water and Sanitation Initiative 4 goals (i) 100 cities (ii) 3,000 rural communities, (iii) water defenders, and (iv) efficient and transparent utilities
Opportunities for the Majority Innovative business solutions to raise the standard of living of the regions low income citizens
Education 3 priorities (i) early childhood development, (ii) quality of education, and (iii) school-to-work transition
We seek togt Leverage human and financial
resources from the IDB with resources and
activities run by private businesses,
philanthropists, foundations, NGOs to support our
strategic initiatives.
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Challenges and Opportunities in Haiti

• Haiti debt totally cancelled (US479 million)
  with a replenishment of the concessional Fund for
  Special Operations (FSO)
• US200 million in grants for Haiti each year from
  2010 till 2020 (totalling US2 billion to be
  granted)
• Grants and Bilateral/Multilateral Financing as an
  incentive for private sector investment

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Other Priority areas

• Gender and Diversity fight discrimination and
  social exclusion due to racial and ethnic origin,
  HIV status, gender, and mental and physical
  disabilities.
• Natural Disaster Insurance Facility for Central
  America an adaptation solution to climate change
  that is rapidly gaining the support of countries
  and international donors by transferring risk to
  the global capital markets.
• Aid for Trade important complement to a
  trade-lead development strategy, and is being
  established in the context of the Global Aid for
  Trade Initiative.
• Food Crisis Response Fund short term food-crisis
  alleviation and longer-term actions that increase
  agricultural and agro-industrial.
• Neglected Tropical Diseases (NTDs) eliminate
  NTDs in the region through both health and water
  sanitation interventions.

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Corporate Partnerships
Lines of business

• Thematic Partnerships
• Partner to create CSR/CS initiatives and cause
  related marketing campaigns on regional and
  national levels across Latin America.
• Engage in flexible and multi faceted partnerships
  and collaborations in strategic fields
• Provide solutions for Corporate Philanthropy
• Cofinancing
• Mobilize new resources to complement IDBs
  lending operations in order to capture the
  regions broad horizon of economic opportunities.

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Corporate Partnerships IDBs Strengths

• Strong knowledge of the region
• Strong presence in the region
• Largest Multilateral Organization in the region
• 50 years of existence

• Uniquely positioned to be a focal point for
  international partnerships focused on Latin
  America
• Allows corporate partners to maximize the
  efficiency and impact of CSR/CS initiatives on a
  national or regional level
• Single Window for Co lending opportunities with
  and without sovereign guarantee across Latin
  America

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Some of our Partners
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A few Public Sector Partnerships in Europe

• Memorandums of Understanding in Europe
• 2007
• European Commission
• 2008
• UNESCO
• AFD (French Development Agency)
• City of Milan
• 2009
• European Investment Bank (amendment)
• 2010
• OECD

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A few Private Sector Partnerships

• Memorandums of Understanding in Europe
• 2009
• CEOE (Spanish Confederation of Employers'
  Organizations )
• CEPES (Spanish Business Confederation of Social
  Economy )
• BBVA (Spanish bank)
• 2010
• SACE SpA (Italian export guarantee company)
• Fundación Atlético de Madrid (soccer club)
• PromoMadrid (Madrid promotion entity)

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Mesoamerican Health Initiative

• An interesting example of public-private-multilate
  ral partnership is the Mesoamerican Health
  Initiative.
• This brings together grants of 50 million each
  from the Bill and Melinda Gates Foundation, the
  Carlos Slim Foundation of Mexico, and the Spanish
  Government, and will be managed by the IDB.
• It seeks to provide donations to close the gap in
  health equity in Mesoamerica for those in the
  lowest income quintile. This will be achieved
  through an expansion in the coverage and
  utilization of reproductive, maternal, neonatal
  and child basic health services for women and
  children under 5 in the lowest income quintile.

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Resource Mobilization in Europe

• A total resource mobilization of US 1,355
  million was achieved in 2009 from European-based
  bilateral and multilateral institutions. This
  includes contributions to trust funds and
  co-financing.
• The Government of Spain channeled resources of
  its Water and Sanitation Fund through the IDB.
• The European member countries supported the IDB
  capital increase (from US 101 to 171 billion),
  as well as the replenishment of the Fund for
  Special Operations, and the grant facility for
  Haiti.
• Project cofinance is being strengthened within
  the context of the Latin American Investment
  Facility (LAIF) of the European Commission, where
  the IDB partners with European financial
  institutions (AECID, AFD, EIB, KfW, Nordic
  Investment Bank, OeEB, SIMEST, and SOFID).

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Consultation and Participation of Civil Society

• The IDB considers civil society organizations
  (CSOs) to be key actors in the development of the
  countries in the region.
• The IDB Group works with these organizations at
  several levels.
• At the operational level, the IDB and its
  borrowers consult with CSOs and affected
  populations during the project preparation and
  implementation stages.
• CSOs may also be eligible to receive financing
  from the Bank.
• At the policy level, different NGOs and interest
  groups reviews drafts of strategy and policy
  documents and submit comments
• Civil Society Consulting Groups have been
  established in all 26 borrowing member countries.

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• Procurement Opportunities

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As consultant/provider of services Why
Procurement is important?

• Foreign government procurement markets are worth
  hundreds of billions of dollars annually offer
  important potential opportunities for IDB member
  country exporters and consultants.
• Procurement on IDB-funded projects in 2009
  1,908 contracts for a total value of US 3,2
  billion
• An international reference

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Project Cycle and Procurement Process
Programming
Identification
Execution and Supervision
Preparation
Analysis
Approval
Project Report
Project Concept Document
Procurement Process
PROCUREMENT ARRANGEMENTS AND PROCUREMENT PLAN
PROJECT OUTLINE
4-8 Years
6 Months
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Procurement - Who are your counterparts?

• Procurement contracts with Executing Agencies in
  projects financed by the IDB
• Goods Works
• Consulting Services

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• Procurement contracts with the IDB
• Consulting services for project preparation,
  technical cooperation.

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Issue clear and balanced bidding documents
Provide sufficient time for bidders to prepare
bidsProvide timely responses to bidders
questionsEvaluate bids based only on criteria
established in bidding documentsAward the
procurement contractCommunicate results to all
partiesAddress complaints promptly and fairly
Procurement - Responsibilities
Bidders Responsibilities

• Issue clear and balanced bidding documents
• Provide sufficient time for bidders to prepare
  bids
• Provide timely responses to bidders questions
• Evaluate bids based only on criteria established
  in bidding documents
• Award the procurement contract
• Communicate results to all parties
• Address complaints promptly and fairly

• Carefully analyze ALL requirements of the bidding
  documents or request for proposal documents
• Strictly comply with the instructions and
  specifications-terms of reference in the
  bidding/request for proposals documents
• Require clarifications to documents in writing
• Review bid/proposal for compliance with the
  requirements before submitting
• Submit bid/proposal with enough time to arrive
  before deadline

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Procurement - Where to find information and
documents

• United Nations Development Business online US
  550/ per year(www.devbusiness.com)
• IDB procurement portal
• Free
• (www.iadb.org/procurement)

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Once you are on the IDBs Internet Website, you
can select Businessesto go to the Procurement
Website.
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IDB Office in Europe www.iadb.org/europe IDBEurope
_at_iadb.org
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