First CAF Disbursement for Desenvolve SP Credit Line
Desenvolve SP is an operation that integrates collaborative work between areas, implements novel financing mechanisms and expands CAF’s presence and impact on other operations in the region.
CAF has made the first disbursement for the Desenvolve SP credit line. The quasi-sovereign USD 20.1 million operation, aimed to boost Sao Paulo’s official development agency, was approved in December 2019 for up to USD 50 million.
This operation is aimed at supporting the agency’s mission to promote sustainable development of the economy of Sao Paulo state through the financing of medium- to long-term investment and working capital projects associated with production plans by using financial solutions tailored to the needs of its clients, both public and private.
This operation has some innovative features that make it different from other initiatives:
- The funds will be allocated to client financing.
- CAF will support Desenvolve SP in the design and implementation of a financial instrument aimed at serving the women’s demographic, thus allocating funds for the productive and business development of women (gender focus and financial inclusion).
- The transaction includes a mechanism for converting the funds to Brazilian reais, which allows—at the client’s request—to switch the loan to local currency, while offering a highly competitive interest rate. Thus, CAF provides a value-added solution aligned with Desenvolve SP’s funding needs, while also being the bank’s first experience of its kind in Brazil.
- The operation is being used to fund SMEs in Sao Bernardo do Campo, thus expanding and deepening the support and presence among the population of a strategic client, while also supporting the reduction of pollution in tributaries of the Pinheiros River, which crosses the city of Sao Paulo.
- CAF is preparing a technical cooperation program to support the agency in identifying and monitoring operations with the potential to be associated with the implementation of the SDGs (United Nations Sustainable Development Goals) by deploying a platform suitable for the monitoring of such goals and their indicators.
- This is the first time that a Brazilian development agency has raised funds directly from the international market and without government guarantees.
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