New financing mechanism for clean energy projects

(Caracas, August 18, 2009).- As a contribution to mitigating the effects of climate change, CAF created the Special Financing Program for Clean Energy Projects (Propel) which will promote execution of small- and medium-scale projects in the clean and alternative energy sector, as well as energy efficiency in Latin America.

"The development proposal promoted by CAF - Enrique Garcia, president of the multinational bank, explained - is based on a model of sustained better quality growth, which is economically efficient, creates productive employment, inclusive, and respects cultural diversity and the environment. The creation of Propel joins the efforts made to tackle environmental issues."

"At the Corporation we have assumed an important commitment to the environment by generating specific strategies and implementing programs and initiatives through development of innovative financing schemes, which increase investment in the sector in the countries of the region," Garcia said.

In the last decade CAF has made an important effort to promote clean and alternative energy and energy efficiency, through various programs which create incentives for the use of this type of energy, and use the environmental credits available in carbon markets. These efforts include the Latin American Carbon Program, Clean and Alternative Energies (PLAC+e), and the Sustainable Energy Program.

A new way to contribute to the environment

Propel aims to solve the difficulties of access to long term finance faced by small- and medium-scale energy projects due to the shortage of funds for this type of project and the level of sophistication and high costs related to their financial structuring.

The new program will finance projects which use proven technologies (hydro, solar, wind, biogas, etc) with investments of up to US$30 million. New projects, expansions or rehabilitation of existing facilities are eligible for long-term loans, capital investment, and total or partial guarantees.