Shareholder countries agree to increase CAF capital by US$2 billion

(Caracas, November 29, 2011).- As part of the action plan of the shareholder countries of CAF - Latin American development bank - to combat potential impacts of the current international situation and the growing demand for financing for development projects, the institution's Board of Directors approved a US$2 billion capital increase.

The decision was taken at a time when another general capital increase is in process, approved in 2009, bringing total capital contributions to over US$5 billion.

"Recognition of the counter-cyclical and catalytic role played by CAF in economic crises in the past, coupled with the confidence of its shareholders, has resulted in this extraordinary capital increase, which will improve the institution’s readiness to provide support and thus mitigate possible short-term negative impacts which may occur in Latin America, without affecting its capacity to continue providing long-term financing for investment projects that promote sustainable development, social inclusion and regional integration," Enrique Garcia, CAF president & CEO, said.

"Thanks to this capital strengthening, which will be paid over the next five years, CAF may grant approvals for a total of US$72 billion in the 2012-2017 period and build a portfolio of over US$30 billion by 2017," the CAF president said.

This new capital increase, to be paid between 2013 and 2016, will lead to significant growth of operations and preserve the institution’s financial strength. As a result, CAF will continue to be one of the most important sources of financing in the region.

García added “the capital increase at this time is a positive message to the markets where CAF issues bonds, and improves the competitiveness of the funds offered by the Institution to its shareholders."

The capital strengthening decided by the Board was proposed by the UNASUR South American Council of Economy and Finance last August in view of the outlook of a worsening global crisis.