FILE PHOTO: Inter-American Development Bank President Ilan Goldfajn speaks during a press conference ahead of the G20 Summit, in Rio de Janeiro, Brazil November 16, 2024. REUTERS/Aline Massuca/File Photo

(Reuters) -The Inter-American Development Bank is aiming to attract private capital to Latin America by helping turn a pool of up to $500 billion of regional local loans into investable global assets, the lender said on Tuesday.

ReInvest+, a partnership between the IDB Group and Brazil's presidency of the COP30, seeks to convert performing loans already on local bank balance sheets into investment-grade, hard-currency securities by adding political and foreign exchange risk insurance. The move is designed to attract institutional investors who typically shy away from early-stage, unrated, and local-currency projects.

“Up until now, we’ve asked investors to change their risk appetite,” IDB President Ilan Goldfajn said. “We’re flipping the script. The projects must go where the money is.”

The initiative is part of a broader push to close the $1.3 trillion annual climate financing gap in developing countries outside China. Public funds cover only a fraction of that need, and private flows have lagged due in part to the perceived added risks.

A study commissioned by the IDB estimates that the global pool of eligible loans could exceed $3 trillion.

The IDB is calling for proposals from commercial and international banks to join the initiative, with submissions due by Oct. 24. Selected partners will be announced at COP30 in Brazil, where they are expected to commit to asset purchases over the next year. There is no preliminary amount goal set.

The IDB will act as a trusted intermediary, setting criteria and offering financial technologies to support the transition.

(Reporting by Rodrigo Campos; Editing by Mark Porter)