Spain increases equity participation

(Madrid, May 18, 2010). – The Spanish Vice President and Minister of Economy and Finance Elena Salgado, and CAF President & CEO Enrique García signed an agreement to increase the Spanish government’s participation in CAF capital, during the VI Summit of Heads of State and Government of the European Union-Latin America and the Caribbean.

The signing reflects the confidence that Spain places in the institution based on its record of supporting Latin American development and integration, and its financial strength and prestige on international markets.

The agreement "covers additional contributions for US$327 million to be paid by 2014, which will bring the holding of Spain – a CAF shareholder since 2002 – to 5% of the equity of the institution."

To serve and respond to the needs of the region, the CAF Board last year approved a US$2.5 billion increase in the institution’s paid-in capital, in addition to the US$1.5 billion capitalization process under way following the entry of Argentina, Brazil, Panama, Paraguay and Uruguay as full members.

As a result, CAF paid-in capital will increase by over US$4 billion in the next few years, more than double the amount at the end of 2009. This change will substantially increase loans and technical cooperation operations to the 18 CAF member countries, for which around US $40 billion was approved in the last six years to support sustainable development and regional integration.

CAF signs agreement with the European Commission

• The signing took place during the VI Summit of Heads of State and Government of the European Union-Latin America and the Caribbean
• The main areas in the alliance will be regional integration, sustainable development, infrastructure and technical and financial cooperation in the framework of the LAIF instrument (Latin American Investment Facility).

CAF President & CEO Enrique García signed with Lady Catherine Ashton, High Representative and Vice President of the Commission, a framework agreement on collaboration which aims to deepen dialogue and cooperation between the two institutions.

García said, "with this agreement CAF strengthens its Ibero-American dimension and reaffirms its catalytic role between Latin America and the European Union. The agreement with the European Commission, which will concentrate on issues of sustainable development and integration, favors a competitive business environment between the two regions."

This signing is important because for the first time CAF is establishing with the European Commission an inter-institutional framework of permanent dialogue and cooperation mechanisms which include active participation in the new LAIF mechanism (Latin American Investment Facility) and joint financing and cooperation projects for CAF member countries in Latin America.