February 28, 2025
Countries across Latin America and the Caribbean could soon gain access to fresh funding for sustainable development projects, thanks to a new $1 billion international fund launched by IDB Invest in partnership with the Japan International Cooperation Agency, (JICA).
The fund, known as TADAC, (JICA Trust Fund Achieving Development of Latin America and the Caribbean), aims to bridge the region’s financing gap by channeling investments into infrastructure, climate mitigation, healthcare, and economic recovery.
A Boost for Private-Sector Development?
IDB Invest, the private-sector arm of the Inter-American Development Bank, (IDB), is adopting a more collaborative approach to financing. By partnering with global institutions like JICA, the organization seeks to mobilize private investment and expand funding opportunities for critical projects.
“With Latin America and the Caribbean facing a growing financing gap, IDB Invest is emphasizing collaboration and co-financing with other development institutions to maximize capital efficiency. The TADAC Fund will further strengthen these efforts,” IDB said in a statement.
This initiative could increase investment capacity by an additional $1.5 billion over the next three years, offering significant support for regional growth.
Japan’s Continued Support for the Region
JICA President Akihiko Tanaka reaffirmed Japan’s commitment to helping Latin America and the Caribbean address social challenges through private-sector investment. He highlighted that the fund will play a key role in achieving the United Nations’ Sustainable Development Goals (SDGs).
Japan has been a longstanding partner in regional development, directing resources to Latin America and the Caribbean for over 40 years. In 2011, JICA and IDB signed a co-financing agreement, which was later expanded under the Cooperation for Economic Recovery and Social Inclusion (CORE) framework.
Last year, JICA increased CORE funding to $4 billion, focusing on areas such as poverty reduction, disaster resilience, universal healthcare, and climate action.
A New Era of Development Despite Global Budget Cuts
The launch of TADAC comes at a time when international funding sources are shifting. Just days ago, the U.S. government, under President Donald Trump and with involvement from Tesla’s Elon Musk, announced budget cuts to USAID, the agency responsible for U.S. international development aid.
Despite these changes, Japan continues to prioritize investment in Latin America and the Caribbean, positioning itself as one of the region’s largest bilateral aid partners.
With TADAC now in place, the future of sustainable growth in the region looks promising, offering new opportunities for businesses, governments, and communities striving for economic and environmental progress.
Invest Caribbean officials welcomed the fund but pointed out that the many strict requirements set by international and institutional investors like the IDB often make it difficult for many private developers in the Caribbean and Latin America to access funding.