Working with France to promote Latin American development

(Caracas, March 13, 2012).- A delegation from the French Development Agency (AFD) headed by its deputy director, Didier Mercier, held a series of working meetings with Enrique García, president & CEO of CAF - Latin America development bank - and executives from the institution.

The objective of the meeting, held on March 8 and 9, was to strengthen cooperation between the two institutions and relations between the EU and Latin America.

García said the meetings were part of the partnership that CAF and AFD began in 2009. He highlighted the catalytic role played by CAF for the region. "Latin America is at a critical crossroads for its future and, if we want to be relevant, we must build bridges of cooperation with all regions, especially Europe."

The challenges of development in Latin America

This is the title of the book published by AFD and produced with Institut des Amériques thanks to the collaboration of more than 15 researchers specializing in Latin America. The study is intended to contribute to the knowledge of the socioeconomic characteristics, public policies and role of the state in the region, leading to a better understanding of the realities of the countries and their diversity.

"There is broad agreement between the proposals presented by AFD with those of CAF; and on that basis we propose that the region build long-term agendas to achieve higher, sustained, efficient, job-creating and inclusive growth" García said during the launch of the book at the headquarters of the financial institution.

The AFD deputy director said the book would deepen relations between Latin America and Europe, particularly France, "historically rooted in cultural, intellectual, economic and political ties." "The financial crisis has shown that the weight exerted by the countries of Asia, and also Latin America, in the global economic recovery."

Facts and figures

The relationship between CAF and AFD offers concrete benefits for the region by promoting projects in the public and private sectors with positive impact on the environment and the quality of life of Latin Americans:

• Credit Agreement: In October 2011 AFD and CAF signed a US$260 million Credit Facility to finance projects in the energy, transport and water and sanitation sectors. Funds have already been approved under this facility for projects which include finance for Electrobras (Brazil), and the Barranquilla and Monteria Urban Transportation Program (Colombia)
• Technical Cooperation Agreements (non-reimbursable): Two have been signed with support from the European Commission through LAIF (Latin America Investment Facility).The first, in October 2010, supports the study of CAF projects in the region in the transport area, preferably with a positive impact on the environment and mass transit systems. The second was for the program to improve public management of water resources in Colombia.
• Agreement linked to the Program for Technical Assistance to Territorial Governments: signed in December 2011, this program links AFD with the CAF Program through grants to help seven local authorities in Colombia formulate their development plans and identify priority projects.
• Co-financing: Support for the Decentralization Strategy promoted by the Colombian Ministry of Finance and Public Credit for US$400 million, and partial funding for the Transmilenio III project in Colombia for US$272 million.
• CAF participation in Proparco: in October 2011 CAF acquired 2.5% of the equity of Proparco (Promotion et Participation pour la Coopération Economique), financial institution whose main shareholder is AFD. This operation opens new and important opportunities for leveraging private sector businesses in the region which will increase finance and investment flows, thus attracting more capital into key sectors of the economy.