MIGA and IDB Invest sign landmark trade finance guarantee framework

IDB Invest, the private sector arm of the Inter-American Development Bank (IDB), and the Multilateral Investment Guarantee Agency (MIGA), which houses the World Bank Group Guarantee Platform, have signed a landmark Trade Finance Guarantee Framework Agreement for up to US$500m to cover the non-payment risk of trade finance transactions.

The strategic partnership will support trade loans and guarantees under the IDB Invest Trade Finance Facilitation Program (TFFP), which aims to stimulate economic growth by expanding trade finance capacity for commercial banks in Latin America and the Caribbean.

The agreement addresses a critical need in global commerce, as the worldwide trade finance gap currently stands at US$1.5tn, with Latin America and the Caribbean accounting for US$350bn of this shortfall. By combining resources, the two institutions aim to narrow this financing gap for essential trade activities, drive economic development, and enhance financial inclusion across the region.

This collaboration represents a crucial step in strengthening regional trade resilience while providing vital trade finance support to exporters and importers throughout Latin America and the Caribbean. This will help them with improved access to liquidity, particularly valuable during periods of market volatility and economic uncertainty, facilitating their international expansion efforts.

“The collaboration between our institutions provides an efficient and scalable mechanism to channel trade finance where it is most needed,” said James P. Scriven, CEO of IDB Invest. “It strengthens our ability to support strategic clients while promoting transparency, integrity, and sustainability in regional trade operations.”

The framework leverages complementary institutional strengths, IDB Invest’s extensive regional presence and experience alongside MIGA’s expertise in risk mitigation, creating a robust foundation to mobilize private sector capital and deliver enhanced support to regional financial institutions.

“MIGA’s guarantee in partnership with IDB Invest will spur trade and boost growth in the LAC region,” said Hiroshi Matano, Executive Vice President of MIGA. “This collaboration will help address the trade finance gap, support MSMEs, and promote sustainable economic development in the region. We look forward to expanding our partnership with IDB Invest to further enhance access to finance and mobilize additional private sector capital in the LAC region.

This initiative directly aligns with the strategic priorities of the two institutions, advancing their partnership agenda among multilateral development banks and supporting the Principles of Systemic Collaboration jointly established by the institutions in 2023.

About IDB Invest
IDB Invest is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of US$21bn in assets under management and over 394 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.

About the World Bank Group Guarantee Platform
Initiated in 2024, the World Bank Group Guarantee Platform consolidates guarantee products and experts from across the World Bank Group at MIGA. It provides a simplified and comprehensive menu of guarantee solutions, enabling clients to select the instrument that best suits their needs. The platform streamlines processes, removes redundancies, and provides greater accessibility by de-risking investments in developing countries. Its goal is to boost the World Bank Group’s annual guarantee issuance to US$20bn by 2030.

Source: IDB Invest