A new bridge between Latin America and Europe

(Madrid, November 20, 2007).- CAF President & CEO Enrique García announced at a press conference that next Monday November 26 a new representative office will be opened in Madrid, Spain. This is the sixth office of the financial multilateral organization and the second located in a non-Andean country. The CAF representative in Madrid will be the Colombian Germán Jaramillo.

"This decision – Garcia said – strengthens the presence of the institution and deepens its ties with the Kingdom of Spain, and forms a closer connection with other countries on this continent, especially members of the European Union. The new office in Madrid confirms the deep integrationist vocation of CAF beyond Latin American borders, and opens an important space for European investment in the region."

"The event has special significance because in 2002 Spain became the only non-Latin American CAF member country. The new office will forge relations even closer than the traditional ones which unite Spain with the other 16 member countries of the corporation," the CAF chief said.

The director representative of the new office, Germán Jaramillo, is doctor of Jurisprudence of the Colegio Mayor de Nuestra Señora del Rosario in Bogotá, and has a Master’s in International Economic Law from the London School of Economics. From 2000 to 2007 he was CAF representative in Peru, after a holding several positions in the private sector of Colombia.

Regional vision

During the last five years CAF has approved operations totaling over US$20.3 billion, which confirms its role as a reliable provider of funds for the region, and expands access to a wide range of sources of financing in Latin America for public and private investment initiatives.

Although the Corporation performs its fundamental role in Bolivia, Colombia, Ecuador, Peru and Venezuela with over US$16 billion approved in the last five years, an important amount has been granted to other shareholder countries. In terms of approvals, the financing of these nations has grown from 11% of the total in 2002 to 22% at the end of 2006. At November 15, 2007 the share of this group of countries in total financing granted by CAF had risen to over 31%. This figure reflects a growing role in direct support for integration processes because the projects financed increase levels of interconnection between areas which are fundamental for regional economic development, and improve the logistics platform for competitiveness. This financial dynamic has also been decisive in the activity of suppliers of goods and services in the European Union which have participated in investment projects for around US$2.4 billion.

Fulfilling its financial role, the Corporation has built a loan portfolio which currently totals US$9.3 billion. The portfolio is composed 39% economic infrastructure projects (transport, energy and telecommunications), 25% social development initiatives (education, water and health), and 17% for the MSME sector through intermediation of commercial banks. Another 12% has gone to structural reforms and institutional strengthening, and the remaining 7% to other activities related to development banking.

In the area of integration infrastructure, in the last five years CAF has approved 54 financing operations totaling US$4.40 billion for 45 physical integration projects in South America, mobilizing over US$12.70 billion in investments. In this framework, CAF observes a strengthening of the opening that Spain has been developing in Latin America and an ally for disseminating good practices in the region.

In Spain, the infrastructure sector has been the basis of the economic and social development of the last 20 years. The country has invested significant funds through innovative financing schemes, which have modernized its logistics platform and positioned its transport system as a leader in construction, financing and project management in Europe and the world.

A solid relation of mutual interest

The most important aspects of the relation between Spain and the Corporation are reflected in the following cooperation agreements: Ecuador-Spain Debt Exchange Program; setting up of the Latin American Port Quality Association (ALCP), founded jointly by CAF, the Spanish Valencia Port foundation, and the Seal of Quality Guarantee Foundation of the Valencia Autonomous Community; agreement for acquisition of nine million tons of CO2 equivalent in the form of carbon credits through the Clean Development Mechanism, among others.

In addition, a series of agreements have been signed with the leading institutions that direct and manage infrastructure in Spain, specifically to work on strengthening the strategic planning of national infrastructure, road conservation, development of observatories on urban mobility, the trans-South American infrastructure network, financing and infrastructure management with mixed formulas, improvement of port service quality, and airport modernization.