European funds to be invested in Latin American development through CAF

(Calgary, March 27, 2011).- "To attract funds from other regions into Latin America is part of the fundamental role of CAF, as an institution that builds bridges with the rest of the world in favor of the region," Enrique García, president & CEO of CAF – Latin American development bank – said, after signing with Rüdiger Hartmann, director for Latin America of KfW Entwicklungsbank (German development bank), and Christoph Sigrist, head of the Economic Infrastructure and Financial Sector Division.

The signing took place during the IDB Annual Meeting which is taking place in the Canadian city of Calgary. Under the agreement, the European Commission, through KfW, granted €2.85 million to be used to support non-reimbursable technical cooperation operations that will be implemented by CAF. in the areas of renewable energy, energy efficiency and industrial restructuring. The funds are part of the €303 million Climate Change Program which KfW and CAF have been structuring in the framework of German financial cooperation with Latin America for the benefit of the CAF shareholder countries.

García said the institution he heads had deepened relations between the two regions "constantly reaffirming our coordinating role between Latin America and the European Union. The agreement signed, with funds from the LAIF facility established by the European Commission recently, is proof of that."

The Latin American Investment Facility (LAIF) supports the countries of the region in their efforts to combat poverty and achieve social cohesion, sustainable development and economic growth. The facility is a financial mechanism which combines grants (non-reimbursable financial contributions from the European Commission and other donors) with loans from European public finance development institutions, both multilateral and bilateral, and from regional financial institutions in Latin America.

Rüdiger Hartmann, director of KfW, emphasized CAF’s importance as a strategic partner of KfW in promoting renewable energy, energy efficiency and climate protection in Latin America. "We are very pleased to have obtained funds from the European Commission to continue stimulating the fruitful cooperation we have with CAF," the KfW director for Latin America said.

CAF and KfW: A successful relationship of over three

decades Since 1977, when relations began with KfW, a large number of projects have received support with the aim of strengthening regional integration and development in Latin America. Recent agreements include a $140 million loan for infrastructure projects granted by the German institution to CAF in 2009, and the Memorandum of Understanding signed in 2010 covering joint work to mitigate the effects of climate change and address the infrastructure needs of the region through promotion, financing and other forms of cooperation in the areas of energy, transport, water and environmental sanitation.

Currently a new concessional loan facility for €150 million is in preparation with KfW to finance infrastructure projects which have a positive impact on the environment and improve mitigation of the effects of the climate change.

KfW Entwicklungsbank - Germany's leading development bank - is a strategic advisor on current issues in the field of development. Its main objectives are to reduce poverty, guarantee peace and make globalization fair. On behalf of the German government it supports reforms, infrastructure and financial systems to achieve socioeconomic and environmentally compatible growth. As a member of KfW Bankengruppe (KfW banking group) it is a funding partner for worldwide development projects. For more information visit www.kfw-entwicklungsbank.de/EN_Home/index.jsp

CAF – Latin American development bank – has the mission of stimulating sustainable development and regional integration by financing projects in the public and private sectors, and providing technical cooperation and other specialized services. Founded in 1970 and currently with 18 member countries from Latin America, the Caribbean, and Europe along with 14 private banks, CAF is one of the main sources of multilateral financing and an important generator of knowledge for the region. For more information visit www.caf.com