$300 Million for Latin America-Europe Business Development
A $300-million loan aims to promote business development and internationalization between Spain and Latin America. The funds may be used to finance operations and/or lodge securities required of companies as part of international bidding processes
April 10, 2013. CAF—development bank of Latin America—and the Official Credit Institute (ICO) signed today a $300 million loan for financing and securities to Spanish and Latin American companies.
The purpose of the operation is to underpin Spanish companies in the process of expanding their businesses in Latin America, as well as Latin American companies that wish to expand their operations in Spain. This agreement is part of the program announced by CAF executive president Enrique García at the Ibero-American Summit of Heads of State and Government, held in Cadiz last November.
The ICO will apply the funds to both direct operations and mediation loans, which are formalized by companies through Spanish financial institutions.
The loans will be issued for a maximum of US$20 million per company. Eligible candidates include Spanish or Latin American companies with projects in Ibero-America, CAF’s scope of action.
Of the total amount, 200 million will be earmarked for loan operations. With these loans, Spanish and Latin American companies will be able to finance their exports or imports, or undertake investment projects abroad. The short- and long-term, dollar-denominated credits meet one of the main demands of the sector, which requires long-term financing in US dollars, which companies often find difficult to access.
The remaining $100 million will be used for securities, thus allowing companies to enter international bidding processes with such requirements in order to submit bids or sign the contracts awarded.
This collaboration between the ICO and CAF expands the ICO catalog aimed at promoting internationalization of companies, as a demonstration of ICO’s commitment to specializing and focusing credits on internationalization.
This operation is a clear sign of the confidence of international organizations in the Spanish economy, as ICO is a public bank backed by the Spanish State.
CAF’s mission includes promoting sustainable development and regional integration, financing projects in the public and private sectors and providing technical cooperation, among other specialized services. Established in 1970 and with 18 member countries (Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Jamaica, Mexico, Panama, Paraguay, Peru, Portugal, Spain, Trinidad and Tobago, Uruguay and Venezuela) and 14 private banks in the region, CAF is one of the main sources of multilateral financing and a major source of knowledge for the region. Go to www.caf.com for more information.
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