IDB and OPEC Fund sign new benchmark Exposure Exchange Agreement

April 16, 2024: The Inter-American Development Bank (IDB) and OPEC Fund for International Development executed an Exposure Exchange Agreement (EEA) setting a new benchmark among Multilateral Development Banks (MDBs) and supranational entities. This is the first time that the EEA instrument is used beyond the pool of Triple-A rated MDBs.  

This arrangement enables both sides to improve portfolio diversification, increase their lending capacity and scale-up their development impact.  

The transaction involves a synthetic exchange of credit risk exposure – a mechanism of credit risk transfer. The exchange is “synthetic” as it does not entail the actual transfer or removal of loans from either MDB’s balance sheet and does not change the relationship between the original lender and the borrower. 

This EEA constitutes another milestone in the ongoing efforts of IDB and the OPEC Fund to improve portfolio diversification, strengthen financial resilience and increase lending capacity in order to more effectively fulfill their development mission in line with the recommendations of the G20-sponsored Independent Review of MDBs’ Capital Adequacy Frameworks. 
 
About the IDB 

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social, and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research projects and provides policy advice, technical assistance, and training to public- and private-sector clients throughout the region. Take our virtual tour. 

About the OPEC Fund  

The OPEC Fund for International Development (the OPEC Fund) is the only globally mandated development institution that provides financing from member countries to non-member countries exclusively. The organization works in cooperation with developing country partners and the international development community to stimulate economic growth and social progress in low- and middle-income countries around the world. The OPEC Fund was established in 1976 with a distinct purpose: to drive development, strengthen communities and empower people. Our work is people-centered, focusing on financing projects that meet essential needs, such as food, energy, infrastructure, employment (particularly relating to MSMEs), clean water and sanitation, healthcare and education. To date, the OPEC Fund has committed about US$27 billion to development projects in over 125 countries with an estimated total project cost of more than US$200 billion. The OPEC Fund is rated AA+/Outlook Stable by Fitch and AA+, Outlook Stable by S&P. Our vision is a world where sustainable development is a reality for all.