Panama increases its equity in CAF

In a ceremony held today in the presidency of the Republic of Panama in the presence of Panamanian President Martín Torrijos Espino, and high-level dignitaries, an equity subscription agreement was signed by Minister of Economy and Finance Ricaurte Vásquez, and CAF President & CEO Enrique Garcia. Under the agreement, Panama increases its equity in the multilateral organization by US$10 million.

The CAF president said the decision reflected the strategic vision of Panamanian President Martín Torrijos Espino of expanding and strengthening his country’s presence in the regional institutions committed to Latin American and Caribbean integration and sustainable development.

"This action,” Garcia said, “demonstrates Panamanian confidence in this institution as a source of strong, sound and timely financing, and in its coordinating role in the integration process." Panama, because of its strategic geographical position, is called on to act as a bridge between Central and South America and a trade bridge between the Caribbean and the Pacific regions, which is a facilitating element for the execution of the Latin American integration strategy that we share, the CAF president added.

On the importance for CAF of having Panama as a partner country, Garcia said that the US$10 million capital increase was a new and important step in the process of strengthening Panamanian presence as a CAF shareholder, and a renewed commitment by the organization to continue supporting Panama’s programs for infrastructure investment.

CAF is currently evaluating important road infrastructure projects in Panama for partial financing through two loans. A US$54-million loan will provide partial financing for construction of the physical infrastructure of the first hub of the Panama City Mass Transport System, with a program of minor improvements at intersections on urban roads in the capital city. A second loan for US$79 million is for rehabilitation and widening to four lanes of the existing two-lane highway between Arraiján and La Chorrera, including bridges and a pedestrian overpass; and the partial expansion of the Transístmica highway between Panama City and Colón, rehabilitation and widening to four lanes of the highway from the locality of Vía 24 de Diciembre to Pacora (10 kilometers), and the second stage of the construction of the road connecting Gonzalillo with the Transístmica Highway.

The project for modernization of mass transport in Panama City could become a creditor in carbon bonds in the framework of the Kyoto Protocol. In this respect, CAF is committed to supporting Panama through technical cooperation in areas such as the training of specialists in the process of obtaining carbon certificates, and accompanying the country in the challenges arising from the negotiation of free trade agreements with various countries in the hemisphere.

The Republic of Panama, which has observer status in the Andean Community, joined CAF as a Series "C" shareholder - non-members of the Andean Community - on November 17, 1997.

During the 2000-2004 period, CAF approved operations for US$13.72 billion in favor of its shareholder countries with disbursements of US$8.96 billion. In 2005, approvals will exceed US$4.00 billion with disbursements in the order of US$1.80 billion. The total portfolio of loans and capital investment will be over US$7.70 billion.