At the 2015 annual meeting in Busan, the Boards of Governors of the Inter-American Development Bank (IDB) and the Inter-American Investment Corporation (IIC) decided to consolidate the IDB Group's private-sector operations into the IIC. This process of consolidation and capitalization, known as the private sector merge-out, took effect on 1 January 2016. The Busan Resolution set forth a “Renewed Vision” for promoting development in the region through the private sector. This Renewed Vision provides a long-term framework (2016-2025) for IDB Invest and focuses on the objectives of: (i) strengthening effectiveness and additionality; (ii) maximizing synergies between the public and private sectors; and (iii) maximizing the efficient use of resources and ensuring long-term financial sustainability. This evaluation seeks to independently assess and report on the effectiveness of the implementation to date of the Renewed Vision, aimed at promoting development in the region through the private sector. Specifically, the general question that the evaluation aims to answer is the following: To what extent is IDB Invest on its way to achieving the end objectives set out in the Renewed Vision? To that end, the Office of Evaluation and Oversight (OVE) used a combination of complementary methods, including a review of strategic and corporate documents, financial and portfolio analyses, interviews and surveys, and documentary analyses of a sample of operations. This evaluation covers the 2016-2021 period and uses as reference the findings in OVE's 2017 midterm review of implementation of the merge-out to further analyze areas that had not yet matured at that time. The evaluation was also guided by a reference framework that linked the objectives of the Renewed Vision to the main activities and initiatives undertaken thus far to help achieve those objectives.

This approach paper defines the objectives, scope, and methodology for the evaluation of IDB Invest by the Office of Evaluation and Oversight (OVE). At the 2015 annual meeting in Busan, the Boards of Governors of the Inter-American Development Bank (IDB) and the Inter-American Investment Corporation (IIC) decided to consolidate the IDB Group's private sector operations into the IIC. This decision was accompanied by a US$2.03 billion capital increase for the IIC over a 10-year period (2016-2025). This process of consolidation and capitalization, known as the private sector merge-out, took effect on 1 January 2016. In 2017, OVE completed a midterm review of implementation of the private sector merge-out to identify emerging lessons that might be helpful in completing the merge-out. In November 2017, the IIC was rebranded as IDB Invest. At the request of the Boards of Executive Directors of the IDB and IDB Invest, this evaluation was included in OVE's 2021-2022 work program. The Busan Resolution set forth a “Renewed Vision” for promoting development through the private sector. This Renewed Vision provides a long-term framework (2016-2025) for IDB Invest and focuses on strengthening development effectiveness, development impact, and additionality of operations, as well as maximizing the efficient use of resources and synergies between the IDB Group's public and private sector activities. The merge-out was selected as the way to implement this Renewed Vision. The challenges posed by the COVID-19 health crisis, as well as current discussions on the need to pursue a new business model for the institution and its financial and operational implications, make this an ideal moment to take stock of lessons learned and provide input for future discussions at the corporate level. Against this backdrop, this evaluation seeks to report independently to the Boards of Executive Directors of the IDB and IDB Invest on the effectiveness of the implementation to date of the Renewed Vision that gave rise to the creation of IDB Invest. This evaluation will also use the findings of OVE's 2017 midterm review of implementation of the merge-out to further analyze areas that had not yet matured at that time (e.g., finance, operations management, development effectiveness, etc.). The evaluation will cover the period from January 2016 (when the merge-out took effect) to December 2021.

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