Inter-American Development Bank
The Inter–American Development Bank (IDB) is the largest regional multilateral development bank in Latin America. Over the past decade, the IDB has approved $69 billion in loans, and has been a major driver of regional infrastructure integration programs, such as Plan Puebla Panama in Mesoamerica and the Initiative for the Integration of Infrastructure in South America (IIRSA).
The IDB has also been a consistent funder of large dams. Among the Latin American projects it has financed are Chaglla, Yacyretá, Sobradinho, Salto Grande, Itaipú, El Cajón, Cana Brava, and Chixoy dams. The bank also financed studies for the Paraguay-Paraná hidrovia project. (See IDB Pipeline Projects to Watch for some proposed IDB water and energy projects.)
The IDB’s environmental and social record is spotty, at best. The IDB began revising its policies on environment, energy, indigenous peoples, and its independent investigation mechanism in 2004. Despite well–heralded consultations with civil society groups, the bank is unwilling to take sufficient measures to even bring its policies up the level of those of the World Bank.
The Andean Development Corporation (CAF), is another important multilateral financial institution. Focusing particularly on the Andean region, CAF provides twice the level of financing regionally that the IDB does. About half of the $3.5 billion it loaned in 2004 went to large infrastructure projects. The CAF has very weak environmental and social policies, and has no independent body to address complaints by populations adversely affected by its loans.
An increasingly powerful financial agency is Brazil’s National Economic and Social Development Bank (BNDES). BNDES approves more than $20 billion in loans annually. Like the CAF, BNDES lacks substantive environmental policies. It has extended financing for regional infrastructure projects, and has financed roads, dams, and transmission lines in other South American nations through its export–import bank.