INVESTOR PRESENTATION - January 2023 - IDB Invest
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INVESTOR PRESENTATION January 2023
CONTENTS
01 About IDB Invest
Our Financial Profile and Risk
02 Management Framework
03 Our Funding Program
04 Our Approach to Sustainability
01 ABOUT US
Investing in sustainable impact
01 ABOUT US
Three Institutions,
One IDB Group
Governments Private The Innovation
Civil society Laboratory
Sector
We are IDB Invest, the private sector
institution of the IDB Group, a
Loans Loans Loans,
multilateral development bank Guarantees
Guarantees Seed and Venture
committed to strengthening Grants
Equity & Mezzanine
Capital Grants
private sector enterprises in
Latin American and the Caribbean. Policy advice Knowledge
Technical Assistance Advisory Services Networks
Knowledge Open Innovation
At IDB Invest, we finance sustainable
enterprises and projects to achieve
financial results that maximize
economic, social and environmental
development while playing a lead role
in integrating ESG sustainability
solutions throughout our investment Common Aligned governance &
We manage the
IDB’s private
IDB provides us
administrative
process. shareholders strategy
sector portfolio services
4
01 ABOUT US
Shareholder Overview
Member Countries and Voting Power
5
01 ABOUT US
What
OUR SECTORS
We Offer
We support our clients by providing Financial Corporates
Infrastructure
finance solutions, advisory services Intermediaries
and knowledge that meet the
evolving demands of the regions
private sector.
Financial Institutions Energy Agribusiness
Non-Bank Transport Manufacturing
Financial Institutions
Finance Solutions Advisory Services Knowledge
• Loans • Climate change • Publications Investment Funds Water and Tourism
• Guarantees • Gender, diversity • Conferences and sanitation
• Equity and and inclusion workshops
mezzanine • Sustainability and • Market trends
• Resource MSMEs • Feasibility studies
mobilization • Public-private • Regional/sectorial Social Telecommunications
• Blended finance partnerships expertise infrastructure media and
• Digitalization technology
6
Category:
Social Affordable basic infrastructure
Objective: Design, finance, build, operate, maintain,
and equip 23 public schools, public technology
centers, and 10 public sports centers
CASE
STUDY
Key facts Expected results
Elcatex Approval Year: 2019 ◆ Enhance availability of public education (early
childhood, primary, and technical education)
Delta Score: 9.4
and public sports education
Total Project: US$ 95M
◆ Promote of full-time education primarily in
IDB Invest : US$ 25 MM disadvantaged socio-educational contexts
◆ Improve conditions of buildings by replacing
Tenor: up to 20 years
inadequate school infrastructure
◆ Improve conditions of facilities for sports
activities at schools near sports centers
7
OUR FINANCIAL
02 PROFILE AND RISK
MANAGEMENT
FRAMEWORK
All figures are expressed in million US dollar
as of Sept 2022, unless otherwise stated.
02 OUR FINANCIAL PROFILE AND RISK MANAGEMENT FRAMEWORK
A Solid Balance Sheet
Liquid assets
23%
USD 1.930
Borrowings
AAA
59% USD 4.989 FITCH
(Stable)
Loans, Debt
Securities, and
Equity Investments*
AA+
S&P
71% USD 6.050 (Stable)
Total Capital
32% USD 2.766
Aa1
Other assets Other Liabilities MOODY’S
6%
USD 545 9% USD 770 (Stable)
ASSETS LIABILITIES AND CAPITAL
9
(*) Net of USD 215 million allowance for credit losses. Total equity Investments: USD 295 million
02 OUR FINANCIAL PROFILE AND RISK MANAGEMENT FRAMEWORK
Strong Financial Profile
Assets S&P Long Term
Multilateral
(USD Millions) Issuer Rating
AAA Rated Peer Comparison IDB-Invest 7.551 AA+
IADB 151.752 AAA
EBRD 74.773 AAA
IFC 105.264 AAA
Source: S&P Global Ratings “Supranational Special Edition. October 2022”
Data as of December 31, 2021, except for IFC, whose data are as of June 30, 2021.
RAC-Ratio Debt/Total Assets 12M Liquidity Coverage Ratio Impaired Loans
75%
66% 2.4
61%
53% 1.6
1.5
31% 34% 1.3
31% 5% 6.5%
22%
0.5% 2%
IDB IADB EBRD IFC IDB IADB EBRD IFC IDB IADB EBRD IFC IDB IADB EBRD IFC
Invest Invest Invest Invest
1002 OUR FINANCIAL PROFILE AND RISK MANAGEMENT FRAMEWORK
Strong
Shareholder
Support
In 2015 the Board of Governors
approved a capital increase of USD 2.0
billion: USD 1.3 billion of new
contributions from member countries
and USD 725 million of transfers by IDB
on behalf of its member countries.
Capital Increase Payment Schedule1
IDB Invest operates exclusively with 100% paid-in capital
11
1 Figures in USD millions. IDB transfers are subject to annual approval by IDB’s Board of Governors02 OUR FINANCIAL PROFILE AND RISK MANAGEMENT FRAMEWORK
Strong Risk
Management Framework
Risk Appetite Policy Capital Adequacy Policy** Liquidity Policy**
Concentration Limits
• Defines minimum capital • Core metric: liquidity
adequacy ratio (CAR) coverage ratio (LCR)
15% 20% 5% / 6% 20% • Internal models deliver
capital requirements i.a.
• LCR time horizon >12
months
for credit and market risk • LCR time horizon and
Maximum Maximum Per client & Maximum
• CAR incorporates rating liquidity haircuts
exposure to exposure by per economic exposure Equity &
agencies’ AA capital consistent with rating
single country subsector * group quasi equity
requirements agency criteria
Leverage Market Risk Liquidity Portfolio Guidelines
3.0x Guiding principle: match
Market risk exposures
4 years A
the structure of assets and
are managed with Value Minimum rating
Maximum Debt / liabilities: tenor, interest Maximum liquidity
at Risk and DV01 limits required
Capital rate and currency risk portfolio duration
12
Limits are based on a concept of allocated capital. Exempt for clients under Economic Group which is based on total exposure
*Except for Financial Institutions sector (60%)02 OUR FINANCIAL PROFILE AND RISK MANAGEMENT FRAMEWORK
High Quality and Diversified
Development Portfolio Development
Portfolio
By country
Development
Portfolio
By Sector
.
13
NPL Ratio: Loans and debt securities past due for more than 90 days All other countries show exposures below 5%
Provisioning Ratio: loan loss allowance / loans and debt securities at amortized cost Country and Sector Breakdown per Year End 2021CASE
STUDY
KLABIN
1403
FUNDING
PROGRAM03 FUNDING PROGRAM
Funding Strategy Funding Programs
● 2023 Funding Program: USD 2bn International Programs Local Currency Programs
○ USD benchmark issues Global Dominican
Euro CP Costa Rica
Program Republic
Program
(SEC Exempt)
○ Public issues in strategic markets
○ MTNs in selected currencies and tenors AUD (Kangaroo) Mexico Paraguay
Program
○ Local currency issues to fund local projects
● Most borrowings are swapped into US dollar Outstanding Borrowings
variable-rate By Currency
● Promote secondary market liquidity through
underwriters
1603 FUNDING PROGRAM
Recent Benchmark Issues
2021 2022 2022 2022
USD 1 billion AUD 300 million USD 1 billion EUR 650 million
5-Year Fixed Rate 5-Year Fixed Rate 3-Year Fixed Rate 5-Year Fixed Rate
Sustainability Bond Green Bond Sustainability Bond Social Bond
Allocation by geography Allocation by geography Allocation by geography Allocation by geography
Other Europe
EMEA 12% Benelux
EMEA EMEA
29% Germany 22%
58% 71%
10%
Americas Americas
Americas France Switzerland
23% 37%
1% 10% 21%
APAC APAC APAC
Uk/Ireland
19% 28% 34% Asia
11%
14%
Allocation by Investor Type Allocation by Investor Type Allocation by Investor Type Allocation by Investor Type
Banks
Banks Others Banks Others
Banks 20%
7% 3% IC 15% 4% IC
6% IC
1% 1%
AM AM 6%
13% 25%
AM AM
26% 11%
CB/OI CB/OI CB/OI
76% 59% 78% CB/OI
49% 1704
OUR APPROACH
TO SUSTAINABILITY
We believe that impact investing is
the future of our region.04 OUR APPROACH TO SUSTAINABILITY
Strategic Priorities Aligned
with Sustainable Development Goals
Productivity Regional Value Gender Climate Change Social Digitalization
and Innovation Chains Equality and and Environmental Inclusion and
Diversity Sustainability Equity
19
1
404 OUR APPROACH TO SUSTAINABILITY
100% Committed to Sustainability
KEY SUSTAINABILITY REPORTING AND IMPACT CORPORATE EXTERNAL ASSESMENTS
TARGETS* MANAGEMENT SUSTAINABILITY AND ESG INDICES
• 100% of new projects • First development bank in • IDB Group is carbon
aligned with Paris Latin America and the neutral since 2006
Climate Agreement from Caribbean to deliver a TCFD
2023 on Disclosure in its Annual • Headquarters Buildings
Report, including Scope 1, 2 received LEED Platinum
• 30% of new financing to and 3 GHG emissions certification (top level);
support climate change several country offices
mitigation and/or • Annual IDB Group LEED Certified.
09/2022
adaptation Sustainability Report and Inter-American Investment Corp.
GRI-Annex following the • Commitment to Gender
• 40% of new projects to standards of the Global Equality: Second
support climate change Reporting Initiative. Multilateral Development
mitigation and/or Bank worldwide and first
adaptation • Founding signatory of the in the Americas to receive
Operating principles for EDGE Move Certification.
• 25% of new projects to Impact Management
support Gender Equality • 38% of staff in mid- and
senior level positions are
• 5% of new projects to women.
support Diversity and
Inclusion
* Select organizational targets according to the IDB Group Corporate Results Framework (CRF). For more information on the CRF visit https://crf.iadb.org/en/2020-2023/level-3?institution=all&status=all&year=2021 20
1
404 OUR APPROACH TO SUSTAINABILITY
Impact
Management
Framework
Objectives
Select operations in line with our mandate as a
development bank
Ensure 100% operations are structured to be
strategically relevant, effective, and measurable
Manage our portfolio to maximize impact and
sustainability
Foster continuous learning from our operations
Ensure accountability to stakeholders
2104 OUR APPROACH TO SUSTAINABILITY
Environmental and Social Sustainability Policy (Updated Dec 2020)
a. The IFC Performance Standards
Our b. The World Bank Group’s Environmental, Health and Safety (EHS) Guidelines
c. IDB Invest Exclusion List
Sustainability
Policy and
Corporate Governance Development Framework
Practices
Access to Information Policy
Independent Consultation and Investigation Mechanism
2204 OUR APPROACH TO SUSTAINABILITY
CATEGORIES
Green Social Sustainability
Our Finance Finance projects
Sustainable
Finance projects
projects with with environmental
with environmental
social impact and social impact
impact
Debt
Framework DEBT PRODUCTS
Public Bond Local Currency Private Commercial
Offerings Bonds Placements Paper
ALIGMENT
2304 OUR APPROACH TO SUSTAINABILITY
Second Party Opinion
“… IDB Invest Sustainable Debt Framework is
aligned with the four components of the Green
Bond Principles 2018 and Social Bond Principle 2020
…”
“… In our assessment, the bonds issued via this
framework will provide an ‘advanced’ contribution
to sustainability …”
2404 OUR APPROACH TO SUSTAINABILITY
Use of Proceeds
SOCIAL PROJECT GREEN PROJECT
CATEGORIES CATEGORIES
1. Affordable basic infrastructure 1. Renewable energy
2. Access to essential services 2. Energy efficiency
3. Food security and sustainable food systems 3. Clean transportation
4. Employment generation and programs to 4. Environmentally sustainable management of
alleviate unemployment from socio-economic living natural resources and land use
crises
5. Climate change adaptation and climate resilience
5. Socio-economic advancement and improvement
6. Sustainable water and wastewater management
25
2
104 OUR APPROACH TO SUSTAINABILITY
Management of Proceeds
COMMITMENT TO ALLOCATE SHARE OF REFINANCING LOOK-BACK PERIOD:
FUNDS WITHIN 24 MONTHS TO BE DISCLOSED 24 MONTHS
27
2
304 OUR APPROACH TO SUSTAINABILITY
Project Evaluation And Selection Process
01 02 03 04 05
ORIGINATION CLIENT ENGAGEMENT APPROVAL CLOSING & FIRST SUPERVISION &
DISBURSEMENT RECOVERY
ESG AND DEVELOPMENT IMPACT DUE DILIGENCE EMBEDDED IN EVERY STEP OF THE PROJECT CYCLE*
Strategic selection Request to the client to Obtain information about the The legal agreement The IDB Invest portfolio
using the Selectivity Tool commit to comply with Client’s assets and management of includes standard E&S management and E&S
IDB Invest E&S risks and impact; conditions, specific Teams supervise the
Screening against Environmental and ESAP requirements and Client’s compliance
exclusion list Social policy and Assign a project categorization impact indicators tied with E&S requirements,
practices based on E&S risk; to milestones. ESAP conditions and
track impact indicators
Conduct a site visit to the project’s Prior to each on a regular basis.
area of influence; disbursement, IDB
Invest verifies E&S
Assess the project against IDB Invest conditions and ESAP
Sustainability Policy requirements; requirements for
compliance.
Prepare an Environmental and
Social Review Summary (ESRS)
and E&S Action Plan (ESAP);
Define impact indicators with
DELTA tool;
Public Disclosure: the Investment
Summary, ESRS and ESAP are
disclosed on our website prior to IDB
Invest Board approval.
* IDB Invest performs ESG due diligence for all projects, including more than 80 new projects in 2021 alone 2704 OUR APPROACH TO SUSTAINABILITY
2021 – Sustainable Debt Issuances
USD AUD AUD
Green Bonds 100M 68M 50M
Finance projects 10 Years 10 Years 10 Years
with Fixed Rate Fixed Rate Fixed Rate
environmental
impact June - 2021 September - 2021 December - 2021
$187M 12% GREEN
MXN AUD
2.5B 400M $423M 26% SOCIAL
Social Bonds 5 years
3 Years
Finance Floating Rate Fixed Rate
projects with $1B 62% SUSTAINABILITY
social impact March - 2021 June - 2021
USD
1.0 B
Sustainability
Bonds
5 Years
$1.6 B
Finance projects
Fixed Rate
with environmental
and social impact 28
Feb – 202104 OUR APPROACH TO SUSTAINABILITY
$799M 67,5%
2021 –Allocation
$257M 21,7%
$113M 9,5%
100%
FUNDS
ALLOCATED 0,8%
$9M
$6M 0,5%
$421M 26% GREEN
$1,184M 74% SOCIAL
92.1% $387M
4.8% $20M
3.1% $13M
2904 OUR APPROACH TO SUSTAINABILITY
Social Indicators
2021 –Impact
Green Indicators
Target Populations
# Projects USD Amounts
30
The indicators presented herein have not been prorated for the portion of IDB Invest’s contribution to the total project * Projects may have more than one target population04 OUR APPROACH TO SUSTAINABILITY
SDG Alignment
31
Projects are usually mapped to more than one SDGOUR APPROACH TO SUSTAINABILITY
04
Category:
Social Socioeconomic advancement and
empowerment
Objective: To support the growth of Banco Guayaquil’s MSME
CASE loan portfolio, with a focus on women-led MSMEs
STUDY
JMMB Bank
Key facts Expected results
Approval Year: 2019 ◆ Grow MSME portfolio by 35%
◆ Grow MSME portfolio lead by
Delta Score: 9.4
women by 10%
Total Project: USD 50MM
IDB Invest : US 50MM
Tenor: 5 years
3204 OUR APPROACH TO SUSTAINABILITY
Independent External
Review
“… Based on the limited assurance procedures
conducted, nothing has come to Sustainalytics’ attention
that causes them to believe that, in all material respects,
the reviewed bond projects, funded through proceeds
of IDB’s sustainability bonds, are not in conformance
with the Use of Proceeds criteria outlined in the
Framework. …”
“… No errors or Exceptions were identified …”
33In summary, our bonds represent a unique
investment opportunity that combines the
strength of IDB Invest as a member of the
IDB Group with strong shareholder support, a
solid financial profile and top credit ratings,
With a demonstrated commitment to the
development of sustainable enterprises in
Latina American and the Caribbean
34Funding Team Management
Eusebio Garre Orlando Ferreira
Join us in Treasury - Head of Funding Chief, Finance and
eusebiog@idbinvest.org Administration – CFO
building Tel.: 202 623 1626
tomorrow,
today.
Monica Landaeta Janne Sevanto
Treasury – Lead Funding Officer Treasurer
monicala@idbinvest.org
Tel.: 202 623 3160
Website: www.idbinvest.org
Bloomberg: IDBINV Corp
LinkedIn: www.idbinvest.org/linkedin
Twitter: www.idbinvest.org/twitter
Facebook: www.idbinvest.org/facebook
Blog: www.idbinvest.org/blogTHIS PRESENTATION IS NOT AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL SECURITIES. IT IS SOLELY PROVIDED AS INFORMATION ONLY. THIS PRESENTATION MAY NOT CONTAIN ALL OF THE INFORMATION THAT IS MATERIAL TO A POTENTIAL INVESTOR. BY ATTENDING THE PRESENTATION OR BY READING THE PRESENTATION SLIDES YOU ACKNOWLEDGE AND AGREE TO THE FOLLOWING: This document and its contents are confidential and proprietary to the Inter‐American Investment Corporation (“IDB Invest”) and may not be reproduced, redistributed, published or passed on (or the contents otherwise divulged) to any other person, directly or indirectly, in whole or in part, for any purpose. This presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of, or located in, any locality, state, country or other jurisdiction where such distribution or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. This presentation and the information contained herein are not an offer of securities for sale in the United States or any other jurisdiction. This presentation does not constitute or form part of, and should not be construed as, an offer or invitation to sell securities of IDB Invest, or the solicitation of an offer to subscribe for or purchase securities of IDB Invest, and nothing contained herein shall form the basis of or be relied on in connection with any contract or commitment whatsoever. Any decision to purchase any securities of IDB Invest should be made solely on the basis of the final terms and conditions of the securities and the information to be contained in the prospectus or equivalent disclosure document produced in connection with the offering of such securities. Prospective investors are required to make their own independent investigations and appraisals of IDB Invest and the nature of the securities before taking any investment decision with respect to securities of IDB Invest. The prospectus (or equivalent disclosure document) may contain information different from the information contained herein. The information in this presentation has not been independently verified. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the presentation and the information contained herein and no reliance should be placed on such information. None of IDB Invest, their advisers, connected persons or any other person accepts any liability for any loss howsoever arising, directly or indirectly, from this presentation or its contents THESE MATERIALS ARE NOT DIRECTED AT OR ACCESSIBLE BY PERSONS RESIDENT OR LOCATED IN ANY JURISDICTION WHERE THE EXTENSION OF AVAILABILITY OF THE MATERIALS TO WHICH YOU ARE SEEKING ACCESS WOULD BREACH ANY APPLICABLE LAW OR REGULATION. This presentation includes statements that are, or may be deemed to be, “forward‐looking statements”. These forward‐looking statements can be identified by the use of forward looking terminology, including the terms “anticipates”, “believes”, “estimates”, “expects”, “aims”, “continues”, “intends”, “may”, “plans”, “considers”, “projects”, “should” or “will”, or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward‐looking statements include all matters that are not historical facts. They appear in a number of places and include, but are not limited to, statements regarding the Issuer’s intentions, beliefs or current expectations concerning the Issuer’s economy. By their nature, forward‐looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward‐looking statements are not guarantees of future performance and the actual results, performance, achievements or industry results of IDB Invest’s economy may differ materially from those described in, or suggested by, the forward‐looking statements contained in this presentation. THESE MATERIALS ARE NOT DIRECTED AT OR ACCESSIBLE BY PERSONS RESIDENT OR LOCATED IN ANY JURISDICTION WHERE THE EXTENSION OF AVAILABILITY OF THE MATERIALS TO WHICH YOU ARE SEEKING ACCESS WOULD BREACH ANY APPLICABLE LAW OR REGULATION. 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