US$85 million agreement signed with Paraguayan Finance Ministry for anticrisis program

(Special, July 23, 2009).- CAF President & CEO Enrique Garcia and Paraguayan Finance Minister Dionisio Borda signed a loan agreement in favor of the Republic of Paraguay for US$85 million to finance execution of the Support Program for Social and Infrastructure Investments (PAISI). The signing took place in the presidential palace in the presence of Paraguayan President Fernando Lugo as witness of honor.

During the ceremony, the CAF President said the financing was aimed at supporting the national government's fight against poverty and mitigating the impact of the global crisis and the long drought which is affecting the country.

The total cost of PAISI is US$149 million, of which 57% will be covered by CAF and the difference by the Republic of Paraguay.

The objective of PAISI is to contribute to the government's Economic Reactivation Plan, as part of the Anti-crisis Plan, by supporting the economic reactivation of the country through execution of a set of social investment and infrastructure programs, in various sectors with high economic and social impact, which will have a favorable effect on improving the quality of life of the population. The set of programs will favor the sectors of agriculture and rural development, housing and habitat, education, social protection and economic infrastructure.

Paraguay, which was initially a CAF "C" series shareholder, is now a full member of the Corporation following the agreement signed in December 2008 during the Latin American and Caribbean Summit held in Brazil. CAF, which has has 17 shareholder countries, has become a regional financing entity and is one of the main sources of financing for Latin America. In recent years the Corporation has approved operations for around US$30 billion in favor of the economic and social development of its member countries and regional integration.

In the current international financial crisis, CAF has been acting dynamically and opportunely to mitigate the effects of the crisis through anti-cyclical and catalytic operations, which is the context of the US$85 million loan signed today with the Republic of Paraguay.