Latin America and the Caribbean face an estimated $99 billion annual financing gap for sustainable development. To help address the gap, IDB Invest, the private sector investment arm of the Inter-American Development Bank, created the JICA Trust Fund Achieving Development of Latin America and the Caribbean with Japan International Cooperation Agency, or JICA, which put up the capital.
TADAC, as it is called for short, will co-finance private sector projects alongside IDB Invest, including infrastructure, disaster risk reduction, universal health coverage, poverty alleviation and climate mitigation.
The two agencies have been working together since 2011, when they teamed up to co-finance renewable energy, water and sanitation and health projects under their Cooperation for Economic Recovery and Social Inclusion, or CORE, framework.
Last year, they expanded CORE’s mandate to develop resilient infrastructure and address inequality and boosted its funding to $4 billion.
Bilateral partner
JICA’s nearly half a century of work in Latin America and the Caribbean has made it IDB’s largest bilateral aid agency. TADAC, JICA’s first fund with IDB Invest and its largest private sector fund in the region, has the potential to expand to a $1.5 billion fund. JICA’s Akihiko Tanaka said the agency is “committed to supporting private-sector efforts to solve the deep-rooted social issues in Latin America and the Caribbean.”
JICA and IDB Lab, the innovation lab of the IDB Group, made their first joint private sector investment in 2019, a $10 million subordinated loan to ABACO, a credit union founded by Japanese Peruvians to lend to small businesses in Peru. In 2023, the two invested $20 million in equity in Dr. Consulta, a chain of medical clinics offering healthcare and insurance to low-income Brazilians.
Last year, JICA, IDB Lab and the US Development Finance Corporation co-invested in Mexican VC firm Dalus Capital’s third fund, to back early-stage startups across Latin America and the Caribbean.
