Haiti and Chile receive US$500 million support for reconstruction efforts

(Caracas, March 8, 2010).- CAF today announced approval of two important financing facilities to contribute to the emergency and reconstruction efforts in Haiti and Chile, both countries massively affected by the recent earthquakes. The first facility for US$200 million is in solidarity with the Republic of Haiti, and the second for US$300 million is for integrated response to the emergency caused by the earthquake in Chile.

The operation in favor of the reconstruction of Haiti was constituted to facilitate access by CAF shareholder countries, interested in helping this nation out of solidarity, to individual loans for financing projects in the country. CAF President & CEO Enrique García said, "this operation is CAF’s response to the expressions of solidarity and commitment by the governments of the region to this country, whose recent natural catastrophe has brought devastating consequences."

In this respect, the Heads of State of the countries of the region, meeting in the UNASUR summit in Quito and more recently in the Unity Summit of Latin America and the Caribbean in Mexico, expressed their concern about the situation in Haiti and gave CAF a mandate to explore financial mechanisms which would permit shareholder countries to channel funds to meet the basic reconstruction needs of the country, in line with the priorities determined by the government of Haiti jointly with other international organizations.

The fundamental objective of these funds is to finance projects which contribute to the sustainable recovery of the economic and social infrastructure, basic services, food production and environment in Haiti.

Garcìa added, “As part of a Solidarity Strategy in favor of the Republic of Haiti, CAF initially approved a US$250,000 grant from the Human Development Fund (FONDESHU) and today approves an additional grant of US$1 million for humanitarian assistance activities.”

For the reconstruction of Chile

For Chile CAF approved a US$300 million financing facility to respond to the emergency caused by the earthquake in Chile last February 27.

Garcia said, "the operation is a CAF initiative to support the Republic of Chile’s efforts to identify sources of multilateral and bilateral finance which can help deal with the emergency caused by the earthquake."

"This type of operation is based on the experience acquired by CAF in responding to emergencies caused by natural phenomena in the region," the CAF president said. The institution has approved similar financing in recent years in favor of the Pluri-National State of Bolivia, the Republic of Ecuador, and the Republic of Peru.

With these funds, the Republic of Chile will be able to execute immediate response activities for victims and provisional restitution of critical services, such as emergency repairs in hospitals and schools, road infrastructure, telecommunication systems, drinking water and sanitation and energy, along with definitive reconstruction of the infrastructure in the areas affected.

The funds will also be used to finance pre-investment studies, as well as institutional strengthening of disaster administration and management. "In other words, they will be used for short, medium and long-term objectives," Garcia said.

The loan is in addition to an initial grant of US$250,000 from the Corporation to meet the immediate needs of affected populations following the earthquake in this CAF partner country.