The Inter-American Development Bank (IDB) has announced a new fund financed by China, through the People's Bank of China, for development projects in Latin America and the Caribbean.

The China Co-financing Fund (CCF) will finance both public- and private-sector projects that promote economic growth.

IDB said it would manage the fund, which it called "a first of its kind" between China and a mutlitaleral bank.

China is also backing another LAC funding programme announced last year. That fund, which is meant to mobilise US$1.8 billion of equity funding for regional business projects, is separate from the CCF, IDB's Chief of Syndications, Jozef Henriquez, told Wednesday Business.

The LAC-China Platform comprises three funds: LAC-China Infrastructure Fund managed by Macquarie Infrastructure and Real Assets; the LAC-China Mid Cap Corporate Fund targeting midsize companies and managed by Darby Private Equity; and the LAC-China Natural Resources Fund managed by SinoLatin Investment Advisors.

China is providing US$2 billion under the CCF.

The IDB said the CCF resources will complement the IDB's own resources for projects.

"China is a key partner for the bank's mission to alleviate poverty and inequality in the region," said IDB president Luis Alberto Moreno in a release from the development bank.

"This partnership is another example of our efforts to promote greater South-South co-operation to narrow funding gaps in sectors with high developmental impact and enhance the social and economic impact of our projects," he added.

The CCF funds will co-finance up to US$500 million of IDB public-sector loans over the next three years, and up to US$1.5 billion for loans made by the bank to private sector entities over the next six years.

China joined the IDB as a donor member in 2009.

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