The Year in Review
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Institutional Affairs
The Partnership Grows
The Board of Governors approved the admission of five new shareholder countries—Belgium, Finland, Norway, Portugal, and Sweden—to the IIC. As of the date of this report, Sweden had completed all of the legal requirements for membership, and the other countries were at various stages in the process.
Issuer Rating for IIC
The Inter-American Investment Corporation was assigned an Aa2 rating by Moody's Investors Service. The rating was based on both qualitative and quantitative factors and on assumptions as to the IIC's future debt issuance levels and loan portfolio performance. Moody's also considered that the $300 million the Corporation obtained through the IDB's Multi-Sector Global Credit Program is a key element that supports the assigned rating.
The agency's decision also ratifies the significant capital commitments from the IIC's regional and nonregional shareholder countries in the form of a $500 million capital increase approved in 1999.
Moody's decision represents its assessment of the Corporation's ability to honor its unsecured financial obligations and may be viewed as a proxy for a senior unsecured debt rating.
In December 2000, Standard & Poor's assigned its AA counterparty rating to the IIC. These two ratings put the IIC in a good position to mobilize additional funding from the financial markets.
Finpyme
Finpyme (Financiamiento Innovador para Pequeñas y Medianas Empresas) is one of the initiatives referred to in the IIC's Three-Year Business Plan adopted after the increase in the Corporation's capital. Finpyme is a pilot program using a diagnostic review methodology for identifying and evaluating projects and making small and medium-size companies more competitive. It is a response to the need to bolster the Corporation's project pipeline while streamlining project processing and gathering useful information on the business environment in which the region's private sector operates. The methodology was designed with the assistance of the Spanish firm Ikei, which presented a comprehensive proposal based on its experience with small and medium-size companies. The start-up of the initiative was financed in part by the Fondo Español de Consultoría-ICEX and funds from the IIC budget.
The information gathered on the business environment using the Finpyme methodology will be useful for future Inter-American Development Bank programming missions and will make it possible to provide governments with recommendations on how to eliminate the obstacles to investment faced by small and medium-size companies in the region.
As of the date of this report, the Corporation has received thirty diagnostic reviews from Chile and twenty from Bolivia. They are being evaluated to determine the possibility of funding the projects proposed by the companies that scored the highest on the scale defined by the Finpyme methodology.
CIFI
The IIC, together with leading financial institutions from Europe and the region, signed a shareholders agreement for establishing the Corporación Interamericana para el Financiamiento de Infraestructura (CIFI). The IIC will invest $10 million in CIFI, which will finance small and medium-size infrastructure projects in Latin America and the Caribbean as a way to further the region's economic development and channel additional funding from private sources outside the region.
More information on this innovative project can be found in the following section on the year's projects.
Environmental Issues
In June, representatives from twenty-seven financial institutions from ten Latin American and Caribbean countries attended an IIC-sponsored environmental management workshop. This year's workshop was cohosted by the International Finance Corporation and Corporación Andina de Fomento as part of an inter-ins ti tutional effort to step up cooperation and simplify the transmittal of information to mutual clients.
All financial intermediaries with which the IIC operates are required by contract to attend these workshops, to learn how to integrate environmental management practices in their own operations and turn good environmental practices into competitive advantages. The workshops focus on banks' responsibility in monitoring the environmental aspects of projects they finance with IIC funds.
Industrial Bank of Japan
The Corporation and the Industrial Bank of Japan signed a two-year, $100 million revolving line of credit. The IIC will use the proceeds to provide funding for small and medium-size companies in Latin America and the Caribbean.
Israel Export Institute
The Corporation signed a memorandum of understanding with the Israel Export Institute. The two organizations will work together in Latin America and the Caribbean by exchanging information and publications, providing logistical support, and identifying potential partners and investors for forming joint ventures between Israeli companies and small and medium-size enterprises in the region.
2001 Annual Meeting
The XVI Annual Meeting of the Board of Governors took place in Santiago, Chile, from March 19 to 21, 2001. During this meeting, the Governors approved the IIC's financial statements for the year ended December 31, 2000, as well as the Corporation's annual report. Prior to the meeting, the IIC hosted a seminar on the role of the private sector in spurring economic growth in Latin America.
