Eximbank Japan grants CAF US$100 million loan

An untied loan for US$100 million at 11 years was today granted by Eximbank Japan to CAF, which is an extraordinary event not only because it involves freely usable funds but because of the term and competitive level of the interest rate.

The funds will be channeled into five of the CAF shareholder countries – Bolivia, Colombia, Ecuador, Peru and Venezuela – as individual loans to finance projects with a high integrationist content, in the areas of telecommunications, energy, transport and mining; modernization and expansion of industrial exporting plants; and technological complementation and support for industrial environmental conversion.

CAF – international financial institution formed in addition by Brazil, Chile, Mexico, Paraguay, Trinidad and Tobago and 22 private banks – plays a catalytic role in generating competitive funds and channeling them into Latin America, as well as making investments to develop priority projects in its shareholder countries through cofinancing activities.

The Corporation is increasingly diversifying its sources of generating funds; most of them currently come from the industrialized countries and from issues placed on the world’s most demanding financial markets, where the institution has issued bonds and other paper totaling US$1.636 billion.

The agreement was signed in Barcelona, Spain, by CAF President & CEO Enrique García, and the Vice Governor of Eximbank Japan Akira Nanbara, during the IDB annual meeting.

The loan will be disbursed in two tranches: 50% in US dollars and 50% in yen, which is important because the Japanese financial institution usually grants loans in its own currency.

This second untied loan granted by the Japanese financial institution is for double the amount of previous one (US$50 million in 1991), which shows the interest of investors from the industrialized world in entering the region, even in an unconditional form.