CAF Closes 2020 with All-time Loan Approval High
In a year marked by COVID-19, CAF—development bank of Latin America—approved a series of loans totaling more than USD 14 billion to support countries in addressing the healthcare and economic emergency caused by the pandemic. It also financed development initiatives in sectors such as water and sanitation, infrastructure, SMEs, digitalization, and provided budgetary aid to its member countries. Also in 2020, Mexico became a full member of the institution.
CAF—development bank of Latin America—closed 2020 with an all-time high loan approval of more than USD 14 billion, most of which was earmarked to deal with the effects of the pandemic on the economy and healthcare systems (some USD 4.5 billion) and to revamp digital, ground and energy infrastructure (more than USD 2 billion), among other initiatives. At the end of its 50th anniversary, the multilateral agency has now approved a total of USD 200 billion since 1970 in its effort to promote sustainable development and regional integration.
“CAF is an unconditional partner of Latin America’s development, and a proof thereof is the record loan amounts we have approved in a year as difficult as 2020,” said CAF executive president Luis Carranza Ugarte. “In addition to quick and timely responses to the external financing needs brought about by COVID-19, we provided continued support in key development areas, and we are reinforcing the institution to provide better technical and financial services to our member countries,” he added.
CAF’s comprehensive actions to support its member countries in addressing the pandemic were launched in an agile and timely manner with non-reimbursable technical cooperation funds for up to USD 400,000 per country, followed by a regional line of credit for extreme weather events, earthquakes, polluting accidents and epidemics, for USD 340 million, as well as loans for
USD 4.1 billion from the regional contingent line of credit for countercyclical measures to deal with the emergency caused by COVID-19.
These initiatives were followed by support actions to micro, small and medium-sized enterprises (MSMEs) for up to USD 1.6 billion, through local development banks in an attempt to boost their internationalization, innovation and productive integration, and thus help create formal jobs and foster economic recovery in the region. In addition, as part of the economic revival efforts, the Board approved a USD 1.2 billion facility called the Utilities Support Program, aimed at companies providing electricity, gas and water supply services, to meet the increased liquidity needs of borrowers during the pandemic.
In 2020, CAF launched a program to boost its equity, which will allow member countries to increase their borrowing capacity by two to four times the capital they provide. Also this year, Mexico’s accession as a full CAF member will help the nation secure greater access to long-term financial resources, as well as technical cooperation for sustainable development, among other benefits.
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