CAF approves loans to Argentina totaling USD 220 million

The Development Bank of Latin America (CAF) has approved two loans for Argentina totaling USD 220 million, which will help to reduce the damage caused by recurrent flooding in the River Lujan basin in Buenos Aires province and boost public-private sector initiatives to help close gaps in infrastructure.

"These loans support the initiatives aimed at improving the country's water infrastructure to mitigate the effects of extreme weather conditions. In addition, they will complement what the Argentinean government is doing to improve the country's investment climate and thereby increase integration of its economy in global value chains," said CAF Executive President, Luis Carranza. 

USD 120 million to prevent and mitigate the effects of flooding in Buenos Aires province

The first loan of USD 120 million will contribute to controlling flow and mitigating the effect of flooding in the middle and upper parts of the River Lujan basin, benefiting more than 150,000 inhabitants in Buenos Aires province. These funds will complement those allocated by CAF in 2016 to manage the lower part of the river basin, and will be used for channeling and retention work, as well as territorial planning and institutional reinforcement.

The initiative, which will benefit the districts of Chacabuco, Lujan, Mercedes, San Andres de Giles and Suipacha, also includes projects and studies aimed at increasing the river's flow capacity by widening it and widening bridges in several segments of the upper and middle parts of the basin. The project includes environmental and territorial planning to efficiently manage the basin and develop appropriate land management frameworks to meet the area's water, environmental and socio-economic needs. 

USD 100 million to encourage public-private sector investment

The second loan of USD 100 million will help to consolidate public policies to encourage private investment in priority sectors of the country's economy. Funds will be used to strengthen institutional and regulatory frameworks on participation, partnership and contracting between the public and private sectors.

This funding, administered by the Department of Finance, will bolster institutional and regulatory systems to encourage the involvement of the private sector and encourage contracts for public-private sector alliances in key sectors such as infrastructure, activities and services, productive investment, applied research and technological innovation. 

Loan agreements signed for USD 163 million

Two loan agreements were also signed with Argentina during the executive session of the multi-lateral organization:

- Strengthening Argentina's energy sector: CAF and Argentina's Department of the Economy and Public Finance signed a loan agreement worth USD 150 million to develop transport and gas distribution infrastructure that will extend coverage of basic energy services throughout the country. The funds will help to diversify the country's energy grid and improve its reliability by expanding the service and increasing coverage in less-developed regions.

- Developing sustainable tourism in Catamarca: CAF and Catamarca province signed a loan agreement for USD 13 million to develop tourism infrastructure to increase the number of visitors and income earned from tourism. Implemented by the Department of Tourism of Catamarca province, the project includes consolidating tourist hubs, introducing new tourism products and services and improving what is currently on offer.

In the last five years (2012-2016), CAF has approved projects in Argentina worth USD 4.012 million, an average of USD 802 million a year, or 7% of the total amount approved by CAF in that time. In the same period, total expenditure amounted to USD 2.576 million, an annual average of USD 515 million.