IDB Group Kicks Off ‘South Connection’ to Boost Connectivity and Growth in South America

WASHINGTON - The Inter-American Development Bank Group (IDB Group) has set in motion the regional program South Connection, following discussion by the Board of Executive Directors. This new initiative seeks to improve connectivity and competitiveness in South America to promote sustainable growth.

South America holds enormous potential, but structural challenges continue to impede progress, including high trade costs, limited trade integration, poor transportation and digital infrastructure, weak energy connectivity, and fragmented regulations. The continent also experiences low levels of investment, underdeveloped trade in services (just 15% of exports, versus 25-30% in advanced economies), limited regional coordination, and gaps in institutional capacity.

South Connection offers a strategic, regional response to these integration challenges. By investing in resilient physical, digital, and energy connectivity, the program will reinforce regional cooperation to tackle shared challenges and unlock new opportunities for private-sector-led growth and job creation.

South Connection joins the IDB Group's three other regional programs, Amazonia Forever, América en el Centro, and ONE Caribbean. These initiatives demonstrate the renewed vision of integration outlined in the Group's Institutional Strategy, IDBStrategy+, based on shared priorities, flexible approaches, and solutions tailored to the diversity of Latin America and the Caribbean.

Acting on the mandate from IDB and IDB Invest governors representing Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru, Suriname, and Uruguay, South Connection is structured around three pillars:

-Enhancing physical and digital connectivity, through modernization of climate-resilient roads, ports, waterways, power grids, and digital infrastructure.

-Optimizing logistics and trade facilitation, by modernizing border crossings, streamlining customs operations, improving interagency coordination, supporting binational logistics hubs, and deploying data-exchange tools.

-Strengthening institutional and regulatory capacities, by promoting regulatory convergence aligned with global standards that encourages investment and improves governance.

The program will mobilize resources from across the IDB Group: the IDB will support sovereign-guaranteed operations, technical assistance, and a robust knowledge agenda; IDB Invest will drive private-sector participation and help structure high-impact projects; and IDB Lab will promote innovation and ecosystem development. The program will also encourage collaboration with other multilateral institutions and donors and support strengthened public-private partnership (PPP) frameworks, which are key to attracting private investment and ensuring better value for money in infrastructure projects.

Environmental and social sustainability will be a cross-cutting principle in all projects, ensuring compliance with environmental and social standards and policies, as well as inclusion of local communities.