PANAMA CITY (REUTERS) - China will invest US$2 billion (S$2.5 billion) to back Interamerican Development Bank (IADB) public and private sector projects in Latin America and the Caribbean.

The contribution by the People's Bank of China will be used to co-finance up to US$500 million in IADB public sector loans and up to US$1.5 billion in private sector credit, available over the next three to six years, the IADB said in a news release on Saturday.

The goal of the fund was to alleviate poverty and boost competitiveness.

China has invested tens of billions of dollars in the region, from Mexico to Argentina, over the last decade to acquire strategic assets or companies in sectors such as oil, minerals and food products.

Last March, China's export-import bank and the IADB announced a joint US$1 billion fund for private and public sector investment in the region, reflecting the country's eagerness to link up with prominent institutions in the region.