Andean Presidents agree to increase capital to US$5 billion

The Andean Development Corporation (CAF) in its CIX board meeting and IX Extraordinary Shareholders' Meeting increased its authorized share capital from US$3 billion to US$5 billion. The meeting also decided to make an extraordinary increase of US$250 million in paid-in capital.

Both decisions are based on the mandate agreed at the Summit Meeting of Andean Presidents held recently in Santa Cruz, Bolivia, in which the heads of State reconfirmed their backing for the Corporation based on its important catalytic role, its position as principal source of financing for the Andean countries in the past year and as effective promoter of regional integration, as well as the consolidation of its position as the region’s best-rated issuer. During 2001, the institution approved operations totaling US$3.2 billion, which represents 60% of total financing by multilateral banks to the Andean countries. Last year, the multilateral lender reported net earnings of US$113 million and negotiated the entry of Spain, Argentina, Uruguay and Costa Rica as shareholders, increasing the number of member countries to 16.

The CAF executive president, Enrique García, said the increase in authorized capital and the subscription and payment of the capital contributions would strengthen the Corporation's financial capacity with a view to increasing support for member countries beyond the normal programs. Such an expansion is especially important at times of great volatility in the flow of resources to the region. The extraordinary increase of US$250 million in paid-in capital will substantially expand the Corporation's portfolio in the next four years, along with the raising of additional funds of over US$3 billion through A/B loans, cofinancing, guarantees and similar facilities, thanks to CAF’s reputation on international capital markets.