More efficient public transportation and energy in Latin America with credit lines of up to EUR 202 million from KfW to CAF
This initiative led by the Government of Germany (BMZ) through KfW and CAF, Development Bank of Latin America, will reduce financing costs for the promotion of projects that are low in emissions of greenhouse gasses, and will contribute to the urban development of the region
The Government of Germany, through KfW (German development bank), announced new concessional credit lines for up to EUR 202 million to CAF, Development Bank of Latin America, to promote the expansion and strengthening of local public transportation systems and a more efficient use of electric energy in the region, through projects that help mitigate the impact of climate change.
The announcement of the new credit lines was made in Lima by Christoph Rauh, Head of the South America Division at the Ministry of Cooperation for Development (BMZ) in Germany, representing KfW, jointly with Félix Bergel and Luis Miguel Calle, Director and Senior Executive of CAF's Direction of Financial Resources.
The German government committed a loan for up to EUR 140 million to promote urban development that is compatible with the climate and environment in Latin America, through the expansion and strengthening of local public transportation systems (subway, train, overhead cable, articulated buses), which reduce emissions of greenhouse gasses. In addition, a regional program will be implemented to promote the conservation and efficient use of electric energy with a loan of up to USD 70 million(EUR 62 million).
Félix Bergel stated, "Sustainable development is a part of CAF's mission, and the protection of the environment is essential. By means of the strategic alliance that we have with the German government and KfW, we have been able to reduce financing costs and improve environmental management in sectors such as transportation, energy, and water and sanitation, to benefit the communities of the region. This new credit lines will help promote the development of new projects in several cities of our member countries. We are grateful to the Ministry of Cooperation for Development (BMZ) in Germany, and to KfW for its support to this type of initiative".
At the same time, Christoph Rauh stated that: "Our commitment is to strengthen cooperation with CAF, especially to promote investments that are in line with the Sustainable Development objectives. Cooperation with CAF is based on a common understanding about the importance of investments that are compatible with the climate and environment, significantly reducing the emissions of greenhouse gasses".
For decades CAF and KfW have provided funds for investments that are climate friendly, especially in the areas of renewable energies, energy efficiency (rehabilitation of electric plants, transmission lines, and rehabilitation of substations), industrial environmental protection, water and sanitation, sustainable development of cities, and urban mobility, by co-financing the subways of Lima, Quito, and Panama, among others. These investments have helped expand infrastructure that is friendly with the environment in CAF's member countries.
In the past ten years, CAF and KfW have materialized credit lines for approximately USD 1 billion, and in the past five years, USD 771 million to support projects that CAF is financing in the region; this is added to the non-reimbursable resources and cooperation funds to promote pre-feasibility, feasibility, and implementation studies of CAF's projects in their initial phase, thanks to the support of the European Commission through the LAIF (Latin America Investment Facility) initiative.
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