A Memorandum of Understanding for improving coordination in project financing between the European Investment Bank and the Inter-American Development Bank was signed today in Washington D.C. The improved coordination concerns projects of common interest to both International Financial Institutions. Projects of common interest are projects that contribute to the economic and social development of the Caribbean and Latin America and are also of mutual interest to the EU, the Caribbean and Latin America.

The MoU signed today in Washington by IADB President Iglesias and EIB vice-President Ms Martín Castella will lead to a more focussed approach on individual project financings and achieve synergies between the respective functional advantages and regional specialities of the two IFIs.

The MoU aims at optimising the combination of the EIB's financial strength and its private sector orientation with the IADB's political reach and coverage of Latin America and the Caribbean and its capacity to identify and implement projects with both public and private partners.

Functional synergies are expected from the IADB's capacity to use different instruments such as loans and guarantees to promote private sector investment in Latin America, which will allow both Insitutions to jointly explore possibilities to attract private investment to the region. On the other hand, EIB's experience in Europe and other regions with public-private partnerships, its experience with the prioritization and planning of investment projects, and its ability to support large-scale infrastructure may be of interest for joint activities.

The combination of the EIB's access to European Investors and the importance of Foreign Direct Investment in the region will play a catalytic role. The EIB profits from closer cooperation with the largest multilateral lender in Latin America and the Caribbean in its corporate operational policy objective to Support EU development and cooperation policies with Partner Countries.

The European Investement Bank already has a Memorandum of Understanding with the World Bank.

The EIB, established in 1958 by the Treaty of Rome, finances capital investment projects that further the European Union (EU) policy objectives. It also participates in the implementation of the EU's co-operation policy towards third countries that have co-operation or association agreements with the Union.

Financing in Africa, the Caribbean and the Pacific (ACP) is carried out under the provisions of the Investment Facility, set up by the ACP-EU Partnership Agreement, signed in Cotonou in June 2000. Under the Cotonou agreement the total financial aid available amounts to EUR 15.2 billion for 2002-2006, of which EUR 11.3 billion is grant aid from the EU member states, EUR 2.2 billion is managed by the EIB under the Investment Facility and up to EUR 1.7 billion is in the form of loans from the EIB's own resources. The Investment Facility aiming at supporting technically, environmentally, financially and economically sound projects in the private or the commercially run public sector.

In Asia and Latin America (ALA), EIB lending activity started in 1993. Under its current mandate, the EIB may lend up to EUR 2.48 billion during 2000 - 2006 to support capital investment projects implemented by subsidiaries of EU companies or joint-ventures between EU and ALA firms, or investments that result in environmental improvements or foster regional integration.

The Inter-American Development Bank (IADB) is an international organization established to promote the economic and social development of its borrowing member countries, that has become the largest multilateral lender in Latin America and the Caribbean and a key provider of non-reimbursable technical assistance.