Solemn ceremony in Brasilia: Brazil becomes shareholder

The entry of Brazil into CAF share capital was formalized today with the signing of an agreement to subscribe to 2,700 "C" series shares of CAF ordinary capital, whose equity value is US$9,240 each with a total cost of US$24,840,000.

The Central Bank of Brazil is the Brazilian institution authorized to make the subscription; its mission is to supervise the public and private financial sector. The ceremony was held in its headquarters in Brasilia, in the presence of CAF President & CEO Enrique García of Bolivian nationality, and Central Bank President Gustavo Laboissiere Loyola.

With the signing, Brazil joins Mexico, Chile Trinidad and Tobago and Tobago as extraregional partner of the Corporation.

CAF and the Brazilian government will sign a second agreement tomorrow in Itamaraty Palace which authorizes the Corporation to undertake in Brazil all operations which correspond with its objectives -- through government departments, public or private corporations, or financial institutions – and grants a series of facilities to expedite its operations in the country.

These include the possibility that CAF open a representative office in Brazil on the lines of those in the capitals of its member countries (La Paz, Bogota, Quito and Lima).

Contribution to development A fundamental part of CAF’s mission is to promote the sustainable development of its member countries and continental integration, which means that the entry of Brazil is an historical milestone for the institution. Brazil’s membership will promote trade, financial and technical exchanges, and intensify cross-border development and physical infrastructure with the Andean nations, especially in the road, energy and communications areas.

CAF is now in a privileged position in the international financial world after placing over US$1.15 billion on the most demanding capital markets: Europe, Japan, United States and Southeast Asia. It is one of the few Latin American issuers -- including countries -- which have obtained and, actually, succeeded in maintaining the investment-grade rating assigned by the three most respected risk rating firms: Moody’s, Sstandard & Poor's and IBCA.

With these conditions, CAF has attracted funds from the industrialized countries into the region on very advantageous conditions, in times of crisis such as those caused by the "Tequila effect," as well as promoting Latin America to international investors and permitting the recovery of confidence will stop

Continental integration In the area of integration, the entry of Brazil is a concrete step toward closer relations between the two South American economic blocks: Mercosur/ Andean Group, prior and fundamental step to much more ambitious proposals such as the participation of the region in hemispheric and world economies.

If this union becomes a reality, the nine member countries would have a market of almost 300 million consumers and their products would circulate freely in a territory of 15 million km². The potential which the expansion of the economic space implies is a fact of great importance for the productive diversification and competitive access of countries to the world trade flows and technological change.

in this respect, CAF has become an effective communication channel between its member countries of the rest of the region because now it has among its members important South American countries, as well as Mexico and a representative of the Caribbean, and hopes to continue expanding its shareholder base to other nations of the continent which wish to increase their business and investments through the credit facilities which the Corporation offers to its members.

Brazil exports to the Andean region mainly automobiles, buses, paper, carton, and light machinery, and imports, zinc, copper, silver, tin, oil, acetylene, cellulose, tuna, hats, vegetable colorings, conserves, acetate, and glass.