CAF has approved US$45 billion for Latin America in the last five years

(Caracas, December 14, 2011).- CAF - Latin American develoopment bank - ended 2011 with total approvals to pubblic and private sectors of US$10.5 billion.

"We support member countries’ efforts to put through an integrated agenda for the sustainable development and integration of the region," CAF president & CEO Enrique García said, adding that approvals have grown 120% in the last five years to a total of US$45 billion for all the region, supporting a total investment of more than US$100 billion.

Almost 50% of approvals in 2011 went to finance infrastructure projects and economic integration, 30% to social and environmental development, and 20% to development of productive sectors.

CAF is now one of the main sources of multilateral financing for Latin America, and the leader in infrastructure and energy especially for projects that favor regional integration.

The institution has also become an important source of knowledge generation for the region and a promoter of innovation and technological development.

During 2011 support through non-reimbursable technical cooperation grants increased for projects relating to social inclusion, competitiveness, research, public policies, institutional strengthening, cultural identity, and environmental preservation, among others.

Caution for the region

On the current situation and outlook for Latin America in 2012, García highlighted the adoption of appropriate macroeconomic policies by countries in recent years which, coupled with favorable external conditions � such as the price of raw mmaterials, has enabled them to resist not only the two most recent crises but even to continue growing.

However, he said "we must be cautious because the depth of the current crisis could affect us."

"The challenge for the region is very great," García said. "Too much concentration on primary exports means structural changes are needed to increase diversification, raise productivity and levels of international competitiveness."

He noted that the growth achieved by Latin America in 2011 - an average of 4.5% - is insufficient if the region is to converge with the industrialized economies over the next 20 years, fundamentally to build the sustainable capability needed to deal with social problems.

"Although we have made ​​a great effort in the area of poverty reduction, the most serious problem facing Latin America which is inequality still exists," García said. "Therefore we need good quality high economic growth, which is not volatile. It is not enough to just to grow, to be sustainable growth not only has to be efficient and productive but also inclusive."

The CAF president noted the need for countries to use the positive platform they have built in recent years, in order to invest in critical areas such as education, infrastructure, technology and institutional strengthening in the public and private sectors. "Education is the basis for reconciling economic objectives with social goals," he said.

At this time of great challenges for the region "CAF is able to play an important role because of its strong identification with Latin America, as a multilateral institution owned by developing countries," García added. The institution favors an integrated development model with long-term vision which reconciles the objectives of macroeconomic stability, microeconomic efficiency, social equity and environmental balance.

On regional integration he said "Latin America as a whole can and must aim higher; to do this it must resume regional integration efforts with a sense of efficiency and pragmatism, conceiving integration not as a luxury but a necessity, as a decisive factor for achieving a significant presence in the world economic and political forum."

Mutual commitment

On the balanced distribution of CAF approvals by country, García emphasized the institution’s commitment to all its shareholders, and the permanent support of member countries, resulting in regular capital increases and full compliance with all its financial obligations.

In anticipation of possible adverse effects on the region from the international crisis, the CAF Board recently approved a US$2.00 billion capital increase, which, together with the increase agreed in 2009 for US$4.00 billion, will double the capital over the next five years.

These increases are recognition of the counter-cyclical and catalytic role played by CAF in the recent economic crises. With the approved capital increases, the institution will be better prepared to support its shareholders in mitigating possible negative impacts in Latin America, without affecting its capacity to continue providing long-term financing for investment projects to promote development.

"Thanks to this capital strengthening, which will be paid over the next five years, CAF will have the capability to approve a total of US$80.00 billion in the 2012-2017 period in favor of sustainable development and regional integration," the head of the financial institution concluded.