CAF receives AFD's support with an innovative financial mechanism to consolidate its position as the green bank of Latin America and the Caribbean
May 22, 2024
CAF - Development Bank of Latin America and the Caribbean - and the French Development Agency (AFD) sign a pro-climate agreement that jointly enables a loan, technical assistance and strategic dialogue dedicated to the structural transformation of CAF into the green bank of Latin America and the Caribbean.
With a commitment to medium and long-term collaboration, CAF and AFD add to their historical achievements a new scheme with a more strategic approach.
This innovative financial instrument - unlike traditional facilities aimed at a portfolio of projects - incorporates non-dedicated funds to support the achievement of objectives measured through change indicators defined in a matrix, to be achieved by CAF, framed in its green strategy.
Through this comprehensive cooperation mechanism, AFD supports CAF in its ambition to become the region's green bank, with a focus on critical issues such as climate change adaptation and biodiversity.
The mechanism channels a EUR 200 million loan to Latin America and the Caribbean, together with technical assistance resources of EUR 500,000 to accompany the transformation process, enhanced by a technical exchange between experts.
“We are very pleased to obtain the support of a strategic ally such as AFD to continue consolidating our position as the green bank of Latin America and the Caribbean, through a comprehensive work that includes financing and technical assistance that will improve the quality of life of people, animals, flora, fauna and the planet in general,” said Ignacio Corlazzoli, CAF's Manager of Resource Mobilization and Global Alliances, at the end of the signing of the agreement at AFD's headquarters.
Marie-Pierre Bourzai, director of AFD's Latin America department, said that “this financing is the fifth line of credit provided by the French government through AFD. Its purpose is to redirect CAF's financing flows towards inclusive projects aimed at mitigating and attenuating climate change and protecting biodiversity. This project contributes to improve our partner's practices and strategy to become the first green bank in the region.”
The granting of a facility of this nature reiterates the strength of the partnership between AFD and CAF, as well as the trust and commitment between the institutions, being the debut for CAF and only [the third] facility of this nature granted by AFD, in addition to being the first granted for the benefit of Latin American and Caribbean countries.