CAF Board of Directors Approves USD 3.43 Billion to Drive Regional Development and Economic Recovery

During the meeting, Mexico was approved as a full CAF member.  Additionally, as much as USD 2.23 billion was approved for projects in Argentina, Costa Rica, Ecuador and Peru, as well as a new regional countercyclical facility of up to USD 1.2 billion for electric, gas and water companies to meet liquidity needs arising from the COVID-19 pandemic.

December 01, 2020

In order to continue to support its 19 member countries in their economic and social revival process following the impacts of the pandemic, the CAF—development bank of Latin America—board of directors approved Mexico’s accession as a full member, which translates into greater access to long-term financial resources, as well as technical cooperation for its sustainable development, among other benefits. For CAF, this equity enhancement will enable the bank to sustain its operational growth and thus continue to maximize its impact on country development and improving people’s living conditions.

During the 170th session of the Board, consultations for a new equity enhancement process were also approved, which will give shareholder countries easier access to greater credits. This action is expected to enable the institution to play an even more important countercyclical role in the economy without affecting its ability to continue to provide long-term financing for investment projects that promote sustainable development, social inclusion and regional integration.

Committed to Latin America and the Caribbean’s economic and social revival, the Board approved a new regional countercyclical instrument of up to USD 1.2 billion for electric, gas and water companies. This instrument seeks to address the increased liquidity requirements of borrowers as a response to the COVID-19 pandemic. In addition, these decisions will help these companies not to compromise funds needed to develop critical infrastructure for their countries, as a key element in boosting growth across the region.

”CAF is an unconditional partner in Latin America’s development, testament to which is the fast, timely and diverse way with which we have supported member countries in their COVID-19 financing needs,” CAF executive director Luis Carranza Ugarte said. “We continue to finance key areas of development such as infrastructure, essential utilities or fiscal stability.”

The last meeting of 2020 also approved a total of USD 2.23 billion in the following loans:

  • Argentina: Three loans totaling USD 544 million . The first, USD 244 million in value, will help to complete digital connectivity in hard-to-reach areas in Argentina from the development and construction of the ARSAT-SG1 geostationary satellite system to provide satellite broadband services. The second, in the amount of USD 100 million, will go to the “Santa Fe + Conectada” digital inclusion and educational transformation program, which plans to expand and modernize the connectivity system infrastructure in the province of Santa Fe. The third is the Municipal Infrastructure Development Program Stage 1 for USD 200 million. These initiatives aim to improve the quality of life of 12 million Argentines.
  • Costa Rica: USD 500 million for the Emergency Support Program in response to the COVID-19 pandemic, which will provide freely available and rapidly disbursable funds to strengthen the public sector’s budget to help meet the demand for priority funds to support the government’s strategy to mitigate the impact of the health crisis and promote economic revival.
  • Ecuador: The institution approved two loans totaling USD 462 million, the first of which is for USD 242 million for the Logistics Infrastructure Program, Phase I, which aims to promote the development of specialized logistics infrastructure for the modernization of multimodal transport, as well as enhance logistics corridors throughout the country. The second, in the amount of
    USD 220 million, is intended toward the Investment and Support Program for Provincial Decentralized Autonomous Governments in Territorial Economic Development.
  • Peru: Two operations were approved totaling USD 724 million. One is for
    USD 350 million, and aims to contribute to the timely allocation of public funds to mitigate the impact of the health crisis, in addition to promoting economic revival and expanding the financial portfolio with the aim of diversifying funding sources that ensure the state’s responsiveness to adverse events. The second totals USD 374 million. It is intended to go to the Road Infrastructure Program for Regional Competitiveness (PROREGION 1), aimed at the resurfacing and maintenance of 4,948 km distributed across 18 road corridors.
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