Bill 440.

Summary.

Article 1 proposes approving the Constitutive Agreement of the Multilateral Investment Fund IV in its entirety. The agreement was adopted by the Assembly of Governors (Asamblea de Gobernadores) of the Inter-American Development Bank (Banco Interamericano de Desarrollo) and the Inter-American Investment Corporation (Corporación Interamericana de Inversiones) in Punta Cana, Dominican Republic. It places this phase after the Multilateral Investment Fund (Fondo Multilateral de Inversiones), Multilateral Investment Fund II (Fondo Multilateral de Inversiones II) and Multilateral Investment Fund III (Fondo Multilateral de Inversiones III). Its objective is to promote sustainable, inclusive development through scalable business innovations in the Bank’s developing regional member countries and developing member countries of the Caribbean Development Bank (Banco de Desarrollo del Caribe). Its functions include testing and scaling innovations, mobilizing resources, generating knowledge, setting measurable results, and addressing poverty, vulnerability, climate change, the environment, gender equality and diversity.

To finance the fund, prospective donors would deposit instruments of acceptance and contribution with the Inter-American Development Bank for the amounts listed in Annex A. Contributions would be paid in four identical annual installments, falling due in relation to the agreement’s effective date. Exceptionally, payment could be made subject to subsequent budget appropriations. The Donors Committee (Comité de Donantes) could accept additional individual contributions, arrange substitute contributions when acceptance and contribution instruments have not been deposited, and authorize general increases under the prescribed voting thresholds. The annex lists contribution amounts for donor countries, including Panama, Argentina, the Bahamas, Barbados, Belize, Bolivia, Brazil, Canada, Chile, China, Colombia, Korea, Costa Rica, Ecuador, El Salvador, Spain, the United States of America, France, Guatemala, Guyana, Honduras, Israel, Italy, Jamaica, Japan, Mexico, Nicaragua, Paraguay, Peru, Portugal, the United Kingdom, the Dominican Republic, Switzerland, Suriname, Uruguay and Venezuela. It provides for the annex to be updated when additional commitments or contributions arise.

The agreement allows a 5% or 3% reduction in a contribution paid in full within the respective periods. It also establishes measures for outstanding payments: temporary loss of the spokesperson role, adjustment factors of 0,80 and 0,70 when calculating voting power, and restrictions on approving non-reimbursable financing, subject to the stated exceptions for regional knowledge activities and fragile countries. It governs payment in permitted currencies or promissory notes and conversion of certain contributions using representative International Monetary Fund exchange rates.

The fund could provide non-reimbursable resources, loans, guarantees, equity and quasi-equity investments, other financial instruments and advisory services. Private entities, governments, public agencies, subnational entities and nongovernmental organizations could receive them for operations consistent with the fund’s objectives. Financing would follow the agreement, the Constitutive Agreement of the Inter-American Development Bank and applicable policies. The text provides for cost sharing, counterpart financing, measurement and public disclosure of results, and respect for a member country’s objection to an operation in its territory. For Caribbean Development Bank member countries that are not members of the Inter-American Development Bank, it provides for consultation, agreement or implementation through that bank.

The Donors Committee would guide, oversee and approve operations. The agreement regulates its meetings, spokespersons, quorum, voting, and the calculation and periodic adjustment of voting power. It provides for an annual report to the Executive Board of the Inter-American Development Bank and independent evaluations that could be carried out by the Bank’s Office of Evaluation and Oversight (Oficina de Evaluación y Supervisión del Banco). It also sets conditions for admitting new donors and amending the agreement, including approval by all donors for changes that increase their obligations or affect specially protected provisions. It limits donors’ financial liability to their overdue and unpaid contributions and regulates withdrawal by written notice.

The agreement would enter into force when prospective donors representing at least 60% of the new contributions in Annex A deposit both instruments. At that point, the agreement governing Multilateral Investment Fund III would be restated, and its assets and liabilities would be governed by the new agreement. The agreement would remain in force for seven years, subject to extension under its terms. It regulates termination and the distribution or reassignment of assets after liabilities have been addressed. Article 2 provides that the approving law would take effect upon promulgation. The subject matter concerns the National Assembly (Asamblea Nacional), Assembly of Governors, Donors Committee, Inter-American Development Bank, Inter-American Investment Corporation and Caribbean Development Bank, and could be of interest to donors, governments, financial institutions, nongovernmental organizations, microenterprises, small and medium-sized enterprises, and start-ups in Latin America and the Caribbean.