Durrant Pate/Contributor

Jamaica and its partners in Latin America and the Caribbean (LAC) are to get a big US$1 billion contribution from the Japan International Cooperation Agency (JICA) in partnership with IDB Invest, the private sector arm of the Inter-American Development Bank (IDB),

The contribution will be used to establish the JICA Trust Fund Achieving Development of Latin America and the Caribbean (TADAC). As JICA’s first private-sector fund with the IDB and its largest private-sector fund in LAC, the landmark initiative aims to catalyse greater private investment by co-financing projects that drive sustainable growth.

The conceptualisation of TADAC marks a new milestone in the collaboration between the IDB and JICA as the Washington DC-headquartered multilateral’s largest aid partner.

Regional role of TADAC

As Latin America and the Caribbean face a growing financing gap, IDB Invest is adopting an originate-to-share business model, emphasising collaboration and co-financing with other development institutions to mobilize private investment and maximise capital efficiency. The TADAC Fund will further strengthen these efforts.

In this context, the TADAC Fund will provide IDB Invest with additional resources, streamline co-financing with JICA by reducing duplication, and leverage IDB Invest’s expertise. Additionally, subject to mutual agreement, the fund has the potential to expand to US$1.5 billion after three years. 

The TADAC Fund aligns with IDB Impact+, a new approach that unifies the work of the IDB, IDB Invest and IDB Lab under one goal to increase its impact and scale, while enabling private sector investments, promoting innovation, and increasing the financing capacity of IDB Invest.

IDB president Ilan Goldfajn commented, “This US$1 billion fund represents a historic milestone in our ongoing partnership with JICA, the agency’s first private-sector fund with the IDB and its largest private-sector fund in Latin America and the Caribbean.”

“By leveraging our combined resources and expertise, we are poised to drive transformative change across Latin America and the Caribbean. This initiative will not only catalyse private investment but also foster sustainable development, innovation, and economic growth in the region,” he continued. 

JICA president Dr Tanaka Akihiko emphasised the importance of this collaboration, stating that “JICA is committed to supporting private-sector efforts to solve the deep-rooted social issues in Latin America and the Caribbean”.

“This investment in partnership with IDB Invest will contribute to closing the financial gap to achieve the SDGs in the region,” he added.

In 2011, the two organisations formalised their partnership through a co-financing agreement, which later evolved into the Cooperation for Economic Recovery and Social Inclusion (CORE) framework.

Last year, JICA expanded CORE’s funding to US$4 billion, significantly increasing resources for co-financing and co-investment in key areas such as quality infrastructure, disaster risk reduction, universal health coverage, poverty alleviation, and climate mitigation.

Through the CORE framework, JICA has also strengthened its collaboration with IDB Invest and IDB Lab. For example, JICA and IDB Invest co-invested over US$20 million in Dr Consulta, a Brazilian health-tech company, marking JICA’s first equity investment in Latin America. 

Additionally, JICA partnered with IDB Lab on the TSUBASA Program, which supports Japanese startups tackling development challenges in the region.