The Inter-American Investment Corporation (Further Payments to Capital Stock) Order 2025
The Inter-American Investment Corporation (Further Payments to Capital Stock) Order 2025 approves a payment of up to 106,000,000 USD to the Inter-American Investment Corporation.
This payment is to support the corporation's increased authorized capital stock, following the adoption of a new business model and capitalization plan (Resolution CII/AG-5/24).
The order also covers associated payments and ensures that the value of the initial payment is maintained.
The Secretary of State is authorized to make the payment and the Treasury approved the order.
Arguments For
Supporting the Inter-American Investment Corporation's new vision: The payment supports the implementation of a new business model and capitalization plan aimed at strengthening the corporation's effectiveness. Evidence of the plan's potential benefits can be found within Resolution CII/AG-5/24.
Strengthening international development efforts: The UK's contribution to the Inter-American Investment Corporation's capital stock bolsters its ability to finance private sector projects which promote development in Latin America and the Caribbean.
Legal basis in the International Development Act 2002: This order complies with existing UK legislation (Section 11 of the International Development Act 2002)
Parliamentary approval: This Order has been reviewed by the House of Commons and received their approval.
Arguments Against
Financial burden: The payment constitutes a significant expenditure of public funds.
Potential risk: Investment in the Inter-American Investment Corporation carries inherent market and political risks in Latin America and the Caribbean.
Alternative uses of funds: The funds could have potentially been directed towards other impactful international development projects.
Lack of detailed impact assessment: The explanatory note states no significant impact is foreseen; however, a more detailed assessment might reveal unforeseen consequences.
- Citation and commencement This Order may be cited as the Inter-American Investment Corporation (Further Payments to Capital Stock) Order 2025 and comes into force on the day after the day on which it is made.
This section provides the official title for this legal instrument and sets its effective date as the day after its enactment.
- Interpretation In this Order— “the Corporation” means the Inter-American Investment Corporation established by an agreement dated 19th November 1984 and ratified by the Government on 1st March 2023; “the Government” means the Government of the United Kingdom; and “the Resolution” means Resolution CII/AG-5/24 entitled ‘New Vision and Business Model for the Inter-American Investment Corporation: Capitalization Proposal and Implementation Plan’ adopted by the Board of Governors of the Corporation on 10th March 2024.
This section defines key terms used throughout the order, namely the Inter-American Investment Corporation, the UK government, and a specific resolution (CII/AG-5/24) outlining the corporation's new business model and capitalization plan.
- Relevant payments In accordance with section 11 of the International Development Act 2002, the Secretary of State may, on behalf of the Government— (a) make a further subscription to the increased authorised capital stock of the Corporation not exceeding 106,000,000 United States Dollars in accordance with the Resolution and arrangements made between the Government and the Corporation, (b) make payment of sums required to maintain the value of the payment mentioned in paragraph (a) in accordance with the Resolution and arrangements made between the Government and the Corporation, and (c) make payment of sums required to redeem any non-interest bearing and non-negotiable notes or other obligations which may be issued or created by the Secretary of State and accepted by the Corporation pursuant to the arrangements referred to in paragraph (a).
This section outlines the specifics of the authorized payments.
The Secretary of State, acting for the UK government, can pay up to $106,000,000 to increase the corporation's capital stock.
The order also allows for payments to maintain the value of this contribution and cover any financial obligations arising from the agreement.
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