USD 300 million credit line to boost Panama SMEs

Financing of investment projects, coverage of liquidity needs and support for medium- and long-term exports from Spanish companies to Latin American countries, are the main areas to be covered by a USD 300 million credit line provided by the Official Credit Institute (ICO) to CAF—development bank of Latin America—, presented on Monday in Panama City.

The presentation of the Framework Financing Convention between the two institutions was attended by the head of ICO, a public bank attached to Spain’s Ministry of Economy and Competitiveness, Pablo Zalba, CAF Director-Representative in Panama, Susana Pinilla, and Spain’s ambassador to Panama, Ramón Santos, who highlighted the objective of this line of credit: to promote trade and internationalization of Spanish companies in Latin America.

The senior officials explained the details of this financial operation to executives from the financial sector, Spanish and local companies and government authorities.

During the event, organized by ICEX España Exportación e Inversiones—a state-run entity—, ICO President Pablo Zalba reported that the agreement “is the first loan signed under the new ICO SME financing product with international banking as mediator.”

Also, CAF Director-Representative in Panama, Susana Pinilla, noted: “At CAF we want to facilitate and boost the historical trade between Spain and Latin America, through access to credit, including small and medium-sized enterprises as drivers of comprehensive and inclusive development.  This line of credit was granted as part of the broadest cooperation arrangement between CAF and Spanish public and private institutions and companies.”

Loans formalized with Spanish companies for investment or liquidity shall be for a maximum amount of EUR 12.5 million, while those for export may total EUR 25 million or the equivalent in the corresponding currency. The repayment and grace periods will be agreed between the local financial institutions affiliated to CAF and the Spanish beneficiary companies.

The presentation was attended by the ambassador of the Kingdom of Spain to Panama, Ramón Santos, ICEX Chief Financial Counseling Officer Christian Garma, and CAF Director for Productive and Financial Sectors of the Northern Region, Mauricio Salazar.

CAF and ICO have collaborated since 1998, through different agreements aimed at enhancing business relations between Spain and Latin America to promote the internationalization of Spanish companies.