Development Bank Quarterly Report (Form QRTLYRPT)

File No. 83-1

Regulation IA

Rule 2 (a)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

100 F Street, NE

Washington, D.C. 20549

PERIODIC REPORT

The following information is filed in accordance with Regulation IA, Rule 2(a), adopted pursuant to Section 11(a) of the Inter-American Development Bank Act.

For the fiscal quarter ended March 31, 2025

INTER-AMERICAN DEVELOPMENT BANK (the “Bank”)

Washington, D.C. 20577

Attached hereto as Annex A is a table which lists sales by the Bank of its primary obligations, all of which were of the Bank’s ordinary capital. There were no purchases by the Bank of its primary obligations.

Attached hereto as Annex B are the financial statements, as of March 31, 2025, of the Bank’s ordinary capital.

Not applicable: there have been no modifications or amendments of any exhibits previously filed with the Commission.

Annex A

Sales by the Inter-American Development Bank

of its Ordinary Capital Primary Obligations

Annex B

Inter-American Development Bank

Ordinary Capital

Management’s Discussion and Analysis

and

Condensed Quarterly Financial Statements

March 31, 2025

(Unaudited)

TABLE OF CONTENTS

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2025

INTRODUCTION

The primary activities of the Inter-American Development Bank (Bank or IDB or IADB) are conducted through the Ordinary Capital and the IDB Grant Facility (GRF). Unless otherwise stated, all financial information provided in these Condensed Quarterly Financial Statements refers to the Bank’s Ordinary Capital. Management believes that the Condensed Quarterly Financial Statements reflect all adjustments necessary for a fair presentation of the Ordinary Capital’s financial position and results of operations in accordance with U.S. generally accepted accounting principles (GAAP). The results of operations for the three months of the current year are not necessarily indicative of the results that may be expected for the full year.

This document should be read in conjunction with the Bank’s Information Statement dated February 26, 2025, which includes the Ordinary Capital financial statements for the year ended December 31, 2024. The Bank undertakes no obligation to update any forward-looking statements.

FINANCIAL STATEMENT REPORTING

The financial statements are prepared in accordance with U.S. GAAP. The preparation of such financial statements requires Management to make estimates and assumptions that affect the reported results. Management believes that some of the more significant estimates it uses to present the financial results in accordance with GAAP include: the valuation of certain financial instruments carried at fair value, the determination of the adequacy of the allowances for credit losses on developmental assets, and the determination of the benefit obligations of the pension and postretirement benefit plans, the fair value of plan assets, and net periodic benefit cost associated with these plans. These estimates involve a relatively high degree of judgment and complexity and relate to matters that are inherently uncertain.

Most of the Bank’s borrowings and all swaps, including interest rate and foreign currency, are measured at fair value through income. The reported income volatility resulting from these non-trading financial instruments is not fully representative of the underlying economics of the transactions as the Bank intends to hold them to maturity. Accordingly, the Bank excludes the impact of the fair value adjustments associated with these financial instruments from Operating Income⁽¹⁾. Therefore, Net fair value adjustments on non-trading portfolios and foreign currency transactions and Board of Governors approved transfers, if any, are reported separately in the Condensed Statement of Income and Retained Earnings.

Recent market updates

In 2024, Latin American and Caribbean (LAC) economies expanded by 2.4% in terms of gross domestic product (GDP). Labor markets remained resilient, with relatively low unemployment rates, while both actual and expected inflation rates broadly converged to pre-pandemic levels. This reflects the easing of global inflationary pressures, including the stabilization of commodity prices.

Looking ahead, LAC economies are projected to grow by 2.0% in 2025, according to the April 2025 World Economic Outlook (WEO) from the International Monetary Fund (IMF). This marks a downward revision from the 2.5% forecast published in the January 2025 WEO, largely due to heightened uncertainty surrounding economic policy shifts in major advanced economies. Nonetheless, expected growth remains broadly in line with historical trends. In comparison, global growth is forecast to average 3.0% over the 2025–2027 period.

Central banks in advanced economies began easing monetary policy in the second half of 2024. Central banks across LAC initiated rate cuts earlier but moderated the pace of easing in 2024 amid renewed inflationary pressures. These pressures were driven by domestic factors such as fiscal uncertainty, strong economic activity in selected countries, and extreme weather events that elevated local food prices.

Geopolitical risks continue to pose a significant downside to the regional outlook. In particular, the evolution of global interest rates and ongoing disruptions to global value chains, exacerbated by persistent changes in trade relations, could dampen growth prospects and contribute to renewed price pressures.

The Bank remains the primary source of multilateral lending to countries in Latin America and the Caribbean and is committed to supporting its clients during periods of global stress. Management expects Bank approvals during the biennial period 2025—2026 of approximately $32 billion, and disbursements of approximately $12 billion during 2025.

From a financial standpoint, Bank policies require Management to balance projected equity accumulation and growth of (risk-weighted) assets through a long-term financial planning process, which is run every year. The Bank has built capital buffers to absorb downward shocks stemming from rating downgrades and market volatility and it regularly assesses financial resiliency through stress testing. Capital and liquidity metrics remained within their respective policy thresholds.

Institutional Strategy

The IDB’s new Institutional Strategy (IDBStrategy+) sets the strategic direction through 2030 and is aligned with global commitments under the Sustainable Developmental Goals (SDGs). For further information, refer to the strategy page of the IDB website.

A new Impact Framework is used to monitor IDBStrategy+, setting new ambition and higher targets in a range of areas, with an enhanced focus on impact. The new Impact Framework helps to deliver tangible results for the people of Latin America and the Caribbean, from improved access to basic services and increased social protection, to enhanced resilience and expanded economic opportunities. It includes indicators that focus on concrete results for beneficiaries as well as new ways to measure progress in support for public-private synergies and resource mobilization. The Impact Framework also includes new targets, such as projects supporting digital transformation (25% of new approvals), projects targeting poor populations (50% of new approvals), and projects supporting sustainable economic growth (75% of new approvals).

Accounting Developments

For a description of new accounting developments, see Note B – Summary of Significant Accounting Policies under “Notes to the Condensed Quarterly Financial Statements” section.

FINANCIAL HIGHLIGHTS

Box 1 presents selected financial data for the three months ended March 31, 2025 and 2024, as well as for the year ended December 31, 2024.

BOX 1: SELECTED FINANCIAL DATA

(Amounts expressed in millions of United States dollars)

Developmental Assets

Developmental assets include loans, guarantees, and debt securities. As of March 31, 2025 and December 31, 2024 approximately 97% of the outstanding developmental assets are sovereign-guaranteed (SG).

For 2025, the approved lending spread and credit commission for the Bank’s non-concessional sovereign-guaranteed loans is 0.80% and 0.50% (2024 - 0.80% and 0.50%, respectively). No supervision and inspection fees have been applied for the said periods.

Table1 presents a summary of the developmental assets approved for the three months ended March 31, 2025 and 2024.

TABLE 1: DEVELOPMENTAL ASSETS APPROVALS

(Amounts expressed in millions of United States dollars)

Table 2 presents the undisbursed portion of approved developmental assets as of March 31, 2025 and December 31, 2024.

TABLE 2: UNDISBURSED PORTION OF APPROVED DEVELOPMENTAL ASSETS

(Expressed in millions of United States dollars)

Table 3 presents the sovereign and non-sovereign-guaranteed loans and guarantees portfolios as of March 31, 2025 and December 31, 2024.

TABLE 3: OUTSTANDING LOANS AND GUARANTEES

(Expressed in millions of United States dollars)

Allowance for credit losses on developmental assets and guarantees outstanding: The allowance for credit losses on developmental assets and guarantees outstanding amounted to $851 million at March 31, 2025, compared to $834 million at December 31, 2024. The increase of $17 million was mainly in the allowance of the NSG portfolio, due to the deterioration of macroeconomic conditions during 2025; partially offset by a decrease in the allowance of the SG portfolio.

Table 4 presents the activity of the allowance for credits losses for the sovereign and non-sovereign-guaranteed portfolios as of March 31, 2025.

TABLE 4: ALLOWANCE FOR CREDIT LOSSES

(Expressed in millions of United States dollars)

Allowance for credit losses on individually assessed SG loans: As of March 31, 2025, the total amount of Venezuela’s sovereign-guaranteed operations in payment arrears amounted to $1,915 million, including interest and fees, from which $1,769 million corresponds to arrearages of more than 180 days. Since 2018, all loans to Venezuela amounting to $2,011 million (unchanged from 2018), were placed in nonaccrual status. Interest and fee income not recognized amounted to $28 million during the first three months of 2025 (March 31, 2024 - $32 million), and the related individually assessed allowance for credit losses was $544 million as of March 31, 2025 (December 31, 2024 - $539 million). There were no other sovereign-guaranteed loans over 180 days past due, or in nonaccrual status as of March 31, 2025 or December 31, 2024.

Under the IDB’s guidelines on arrears, the Bank cannot undertake any lending activities in Venezuela until its arrears are cleared. As a matter of policy, the Bank does not renegotiate nor reschedule its SG loans. Venezuela, a founding shareholder of the IDB, has reiterated, through its representative at the IDB Board of Directors, its commitment to the Bank and its intention to undertake payments. The Bank expects to collect all amounts due, including interest at the contractual interest rate for the period of delay. As a result, the allowance recorded represents the estimated loss from the expected delay in debt service payments. The assessment and estimation of credit loss is inherently judgmental and reflects Management’s best estimate based upon the information currently available. Management will continue to monitor its credit exposure periodically and reassess the credit loss estimate accordingly.

Allowance for credit losses on individually assessed NSG loans: The Bank had individually assessed NSG loans with outstanding balances of $144 million at March 31, 2025, compared to $102 million at December 31, 2024. As of March 31, 2025, the allowance for credit losses on individually assessed NSG loans was $45 million, compared to $37million at December 31, 2024. The percentage of the NSG allowance for credit losses on individually assessed loans was 31% as of March 31, 2025 (December 31, 2024 - 36%).

Investments operations

Approximately 92% of the Bank’s investments are held in high quality securities rated AA- or higher.

In 2025, the trading investments portfolio experienced net mark-to-market gains of $22 million, compared to $26 million in 2024, mainly due to the mark-to-market impact of tighter credit spreads in a volatile environment.

Capacity Building, Asset Management and Advisory (CAsA) pilot program

The Bank’s CAsA pilot program aims to help build or strengthen the institutional capacity of central banks and official institutions in the borrowing member countries. To this end, CAsA provides a range of services that includes managing a portion of the institution’s assets along with technical missions, fellowships, and other training opportunities. Fees are based on the average value of the portfolio managed and are used to provide the entire range of services under the program. As of March 31, 2025 total assets managed under the CAsA program amounted to $634 million (March 31, 2024 – $200 million).

Borrowing operations

During the first three months of 2025, the Bank issued bonds for a total face amount of $9,058 million (March 31, 2024 – $8,314 million) that generated proceeds of $9,057 million (March 31, 2024 – $8,316 million. The average life of new issues was 4.7 years in 2025 (March 31, 2024 – 5.1 years).

During 2025, the Bank continues to be rated Triple-A by the major credit rating agencies, and its outlook remains stable.

Balance Sheet Optimization

Exposure Exchange Agreements: The Bank reduces its sovereign-guaranteed loan portfolio concentration by entering into Master Exposure Exchange Agreements (EEA) jointly with other Multilateral Development Institutions (MDIs) and executing bilateral transactions under such framework. The EEA reduces portfolio concentration by simultaneously exchanging coverage for potential nonaccrual events between MDIs for exposures from borrowing countries in which an MDI is concentrated, to countries in which the MDI has no, or low, exposure, through use of guarantees. For further information, refer to Note D - Developmental assets – loans and guarantees of the Condensed Quarterly financial statements.

Credit Risk Insurance: The Bank has executed credit risk transfer transactions with private insurance companies covering a small portion of the Bank’s sovereign exposures. The Bank has executed two transactions, the first in 2023 and the second in 2024, totaling $600 million of insurance coverage from 18 highly rated international insurance companies.

Credit Risk Guarantee from Shareholders: In 2024, the Bank executed its second guarantee arrangement with the Swedish International Development Cooperation Agency (SIDA). Combined, these transactions include $350 million of coverage resulting in over $750 million of additional financing in the region. The most recent transaction signed in 2024 was designed to support the Bank’s Amazonia Forever initiative.

The Bank is focused on expanding these types of transactions with new partners and expanding the relationships with existing partners.

Financial Results

Operating Income: Operating income includes the net interest income on earning assets, other loan income, net investment gains (losses), the provision (credit) for developmental assets credit losses and net non-interest expense.

Table 5 shows a breakdown of Operating Income for 2025 and 2024.

For the three months ended March 31, 2025, Operating Income was $343 million compared to $355 million for the same period last year, a net decrease of $12 million. The decrease was mainly due to: (i) an increase in the provision (credit) for developmental assets credit losses and (ii) a decrease in net investment gains; offset by (iii) a decrease in net non-interest expense and (iv) an increase in net interest income.

TABLE 5: OPERATING INCOME

(Expressed in millions of United States dollars)

Net interest income: The Bank’s net interest income (NII) is driven primarily by two sources: the lending spread the Bank charges on all its SG loans and the income earned on its equity-funded assets. The SG lending spread on the Bank’s non-concessional operations is reviewed and determined annually by the Board of Directors as part of the Bank’s long-term financial planning exercise. If a change is approved, the new SG lending spread applies to the entire outstanding balance of non-concessional SG loans. Net interest income earned from equity-funded assets is the result of an Asset Liability Management (ALM) strategy governed by polices approved by the Board. The ALM strategy seeks to achieve stable net interest income and preserve the economic value of its equity. The Bank uses derivatives to manage interest rate risk on its Balance Sheet and, in particular, the repricing and maturity profile of the Bank’s equity-funded assets in accordance with the ALM policy. In 2021, a new model was implemented, by which interest rate swaps are used systematically to modify the characteristics of equity-funded assets to minimize volatility of net interest income driven by changes in USD interest rates.

Sensitivity to foreign exchange rates is negligible as the Bank economically hedges substantially all exposures with foreign currency swaps.

The Bank’s NII reached $484 million during the first three months of 2025, compared to $473 million for the same period last year. The increase when compared with prior year was mainly due to the income earned on equity funded loans and a larger loan portfolio.

Figure 1 below shows the Bank’s net interest income during the first three months of the last three years.

FIGURE 1: FINANCIAL RESULTS – NET INTEREST INCOME

For the quarters ended March 31, 2023 through 2025

(Expressed in millions of United States dollars)

The average interest-earning asset and interest-bearing liability portfolios, after swaps, and the respective financial returns and costs for the three months ended March 31, 2025 and 2024, and the year ended December 31, 2024 are shown in Table 6.

TABLE 6: ASSET/LIABILITY PORTFOLIOS AND RETURNS/COSTS

(Amounts expressed in millions of United States dollars)

Net investments gains: Net mark-to-market investment gains amounted $22 million, compared to $26 million for the same period in 2024, mainly due to the mark-to-market impact of tighter credit spreads in a volatile environment.

Provision for developmental assets credit losses: The provision for developmental assets credit losses of $17 million in 2025 was mainly due to an increase in the allowance for credit losses of the NSG portfolio due to the deterioration of macroeconomic conditions during 2025; offset by a decrease in the allowance for credit losses on the SG portfolio.

Net Non-interest Expense Net non-interest expense amounted $174 million, compared to $189 million for the same period in 2024. The main components of net non-interest expense are presented in Table 7.

TABLE 7: NET NON-INTEREST EXPENSE

(Amounts expressed in millions of United States dollars)

Net Income

Net income amounted $368 million during the first three months of 2025, compared to $207 million for the same period in 2024. The increase of $161 million was mainly due to gains in Net fair value adjustments on non-trading portfolios and foreign currency transactions.

TABLE 8: NET INCOME

(Amounts expressed in millions of United States dollars)

Net fair value adjustments on non-trading portfolios and foreign currency transactions: Net fair value adjustments are mainly a result of the different accounting treatment between loans, which are carried at amortized cost, and the interest rate and foreign currency swaps on loans, which are carried at fair value. Changes in the fair value of the interest rate and foreign currency swaps on loans are reflected in earnings, while the changes in the fair value of loans are not, as they are carried at amortized cost. In contrast, changes in the fair value of borrowings largely offset the changes in interest rate and foreign currency swaps on borrowings, as the majority of borrowings are carried at fair value. Mainly due to a decreases in the USD interest rates yield curve, the Bank had net fair value gains on non-trading portfolios and foreign currency transactions of $134 million for the three months ended March 31, 2025, compared to $31 million loss for the same period in 2024. Unrealized gains or losses in the net fair value adjustments on non-trading portfolios gradually tend to zero as the related financial instruments maturity approaches and their fair values converge with their amortized costs.

Transfers to the IDB Grant Facility: Income transfers from the Ordinary Capital to the GRF are subject to the requirements of the Agreement and other applicable financial policies, and they will be considered based on actual disbursements and fund balance of the GRF. In March 2025, the Board of Governors approved income transfers from the Bank to the GRF amounting to $164 million (2024 – $159 million). Since 2011, the GRF has received income transfers totaling $1,888 million (2024 - $1,724 million).

CAPITAL ADEQUACY

The Bank’s Capital Adequacy Policy (CAP) consists of a Capital Adequacy Policy mandate (Mandate) and regulations that determine capital requirements for credit and market risk in both its lending and treasury operations. The CAP also includes capital requirements for pension and operational risks. The Mandate, approved by the Board of Governors, requires the Bank to maintain its Triple-A foreign currency long-term issuer rating, and the establishment of capital buffers, specifically to assume financial risks in times of stress, while preserving the Bank’s lending capacity.

The CAP allows the Bank to measure the inherent risk in its developmental assets portfolio due to the credit quality of its borrowers and the concentration of its loans. Specific risk limits in terms of capital requirements for investments and derivatives are included that enable Management to achieve more efficient funding and investment strategies following the risk tolerance established by the Board of Executive Directors. The Bank is operating within its policy limits.

CONDENSED BALANCE SHEET

Developmental assets

Loans: The loan portfolio is the Bank’s principal earning asset. As of March 31, 2025, the total volume of outstanding loans was $115,935 million, of which $4,926 million was under concessional terms, compared with $115,812 million and $4,955 million, respectively, as of December 31, 2024.

The Bank makes loans and guarantees to the governments, as well as governmental entities, enterprises, and development institutions of its borrowing member countries to help meet their development needs. In the case of loans and guarantees to borrowers other than national governments or central banks, the Bank follows the policy of requiring a joint and several guarantee engaging the full faith and credit of the national government. The Bank also offers sovereign-guaranteed concessional lending through a blending of regular and concessional financing.

As of March 31, 2025 and December 31, 2024, 3% of the outstanding loans and guarantees exposure was NSG. The NSG portfolio, including loans to other multilateral development institutions, totaled $2,989 million, compared to $3,129 million at December 31, 2024.

Debt securities: Debt securities related to development investments are classified as held-to-maturity given the Bank has the intent and ability to hold these securities to maturity. For debt securities where the Bank does not have the intent to hold the securities to maturity, the Bank elects the fair value option. As of March 31, 2025, debt securities outstanding amounted to $624 million (December 31, 2024 – $632 million).

Investment Portfolio

The Bank’s investment portfolio is comprised of highly-rated securities and bank deposits. Its volume is maintained at a level sufficient to ensure that adequate resources are available to meet future cash flow needs as determined in the Bank’s liquidity policy.

Borrowing Portfolio

The portfolio of borrowings is mostly comprised of medium- and long-term debt raised directly in capital markets. Borrowings outstanding, after swaps, at March 31, 2025 increased by $1,582 million compared with December 31, 2024, primarily due to larger amount of new borrowings ($9,057 million), than maturities ($7,609 million).

Equity

Equity at March 31, 2025 was $40,674 million, an increase of $284 million from December 31, 2024, mainly due to Net income of $368 million for the first three months of the year; partially offset by a $72 million loss related to the Net fair value adjustments on borrowings attributable to changes in instrument-specific credit risk, and $15 million amortization of net actuarial losses and prior service credit on pension plans.

The Debt-to-Equity ratio uses gross debt, as opposed to net debt, to facilitate its comparability with other MDBs. “Total Equity” (utilized as the denominator within the Debt-to-Equity ratio) is defined as Paid-in capital stock and Additional paid-in capital, net of Capital subscriptions receivable, less Receivable from members, plus Retained earnings, minus borrowing countries’ local currency cash balances, and accumulated other comprehensive income. The Debt-to-Equity ratio has a maximum policy limit, whereby the Bank cannot exceed 4.0x of equity. Table 9 presents the composition of the Debt-to-Equity ratio as of March 31, 2025 and December 31, 2024.

TABLE 9: TOTAL DEBT-TO-EQUITY RATIO

(Amounts expressed in millions of United States dollars)

LIQUIDITY MANAGEMENT

Table 10 shows a breakdown of the trading investments portfolio at March 31, 2025 and December 31, 2024, by major security class and its contractual maturity, on securities held at the end of the period.

TABLE 10: TRADING INVESTMENTS PORTFOLIO BY MAJOR SECURITY CLASS AND MATURITY DATES

(Expressed in millions of United States dollars)

COMMERCIAL CREDIT RISK

Commercial credit risk is the exposure to losses that could result from the default of one of the Bank’s investment, trading, or derivatives counterparties. The primary objective in the management of the liquid assets is the maintenance of a conservative exposure to credit, market, and liquidity risks. Consequently, the Bank invests only in high quality debt instruments issued by sovereign and sub-sovereign governments, agencies, supranationals, banks and corporate entities, including asset-backed and mortgage-backed securities.

Table 11 provides details of the estimated current credit exposure of the Bank’s investment and swap portfolios, net of collateral held, by counterparty rating category. As of March 31, 2025, the credit exposure amounted to $37,590 million, compared to $34,919 million as of December 31, 2024. The credit quality of the portfolios continues to be high, as 85.1% of the counterparties are rated AAA and AA, 7.2% or equivalent short-term ratings (A1+ and A1), 6.1% are rated A, and 1.6% are rated BBB or below, compared to 86.8%, 4.0%, 8.6% and 0.6%, respectively, at December 31, 2024.

TABLE 11: CURRENT CREDIT EXPOSURE, NET OF COLLATERAL HELD, BY COUNTERPARTY RATING CATEGORY⁽¹⁾

(Amounts expressed in millions of United States dollars)

SUBSEQUENT AND OTHER DEVELOPMENTS

IT Strategy and Cybersecurity

The technologies landscape continues to evolve rapidly. Access to technologies, technical devices, hybrid work environments, a push for more agility and the emergence of disruptive technologies like cloud computing, generative AI, robotics and automation, and increasing dependencies on third parties have obliged IT departments to move from being a support function that provides and maintains equipment, to a strategic enabler and business partner for the institution.

Technology is now instrumental for the performance of the organization. Organizations with high-performing IT departments and a sustainable Digital Transformation Program, have a competitive advantage over their peers and can ultimately provide better results and value for their customers.

In that context, where technologies and digital transformation are pivotal, Management’s IT Strategy 2022-2027, approved by the Board of Directors in 2022, aims to create more impact and results for the IDB and its clients. The strategy focuses on increasing the Bank’s digital fluency for better technology usage and protection, improving agility to achieve greater efficiency and results, becoming a data-driven institution, incubating new technologies like generative AI, and modernizing and securing our digital landscape.

Currently, two topics continue to be considered: (i) Generative AI. An institutional taskforce is in place, led by the Bank’s IT Department, and focus on safe and ethical usage of generative AI technologies, training and awareness, experimentation, and adoption of those technologies. This approach is allowing the Bank to keep a progressive and modern approach on the usage of advanced technologies, stay ahead but at the same time promote a safe and ethical usage; and (ii) Cybersecurity. The Bank continues to invest in security, remote access, end-point protection, cloud technologies, and operational risk management. The Bank’s IT Strategy reinforces the importance of ongoing investments in cybersecurity, with agility for rapid adjustments especially around employee awareness and cyber protection, deployed along the year to proactively improve the Bank’s security posture.

In this environment, the Bank has experienced an increase in cybersecurity threats, not unlike other financial institutions. To protect the security of its computer systems, software, networks and other technology assets, the Bank, through its Information Resources Security Policy and supporting standards program, has adopted a multilayered approach to cybersecurity risk management to help detect

malicious activities within the organization and from external sources. In managing emerging cyber threats, the Bank regularly reviews and adapts its technical and process-level controls and raises the level of user awareness to mitigate the risks. On a periodic basis, the Bank also assesses the maturity and effectiveness of its cybersecurity defenses and strives to incorporate industry standard risk mitigation techniques, including but not limited to, targeted testing, internal and external audits, incident response tabletop exercises, and mandatory training to staff.

Recommendations Capital Adequacy Framework (CAF)

The Bank is currently implementing the recommendations contained in the MDB CAF review sponsored by the G20². The CAF Review includes seventeen recommendations, grouped in five categories. The first category deals with risk appetite and financial policy framework; the second category addresses the value of callable capital; the third category calls for financial innovation to increase MDBs’ lending capacity; the fourth category pertains mainly to the interaction with credit rating agencies, and the fifth refers to governance and the use of loan performance data to maximize resource mobilization. Management and the Board of Executive Directors have discussed the status and the sequence that the Bank intends to follow to implement all recommendations.

Funded Status of Pension and Postretirement Benefit Plans (Plans)

The volatility in the equity and credit markets, as well as changes in interest and inflation rates, affect the funded status of the Plans. As of March 31, 2025, the funded status of the Plans remained at 114% (December 31, 2024 - 114%) mainly due to an increase in market returns, offset by an increase in Plan obligations due to decreases in discount rates when compared to December 31, 2024. The Bank recognizes actuarial gains and losses on its Plans through comprehensive income at the end of each calendar year, when the Plans’ liabilities are remeasured, as required by U.S. GAAP. Therefore, the pension benefit obligation used to calculate the funded status as of March 31, 2025 is an estimated amount that will not be remeasured until the end of the year.

Management Changes

On February 18, 2025, Ms. Laura Alfaro was appointed as Chief Economist and Economic Counsellor, effective June 1, 2025.

On February 20, 2025, Mr. Lawrence J. Sacks was appointed as Manager of the External Affairs and Communications Department, effective March 16, 2025.

Condensed Quarterly Financial Statements

(Unaudited)

ORDINARY CAPITAL

INTER-AMERICAN DEVELOPMENT BANK

CONDENSED BALANCE SHEET

(Expressed in millions of United States dollars)