USD 400 million for the transport, energy and productive financing sectors of Argentina

The Board of CAF-development bank of Latin America- confirmed its commitment to support the sustainable development of Argentina during its 163^rd meeting, held today in Madrid, Spain, approving a three-installment loan for a total of USD 400 million. The initiatives are focused on strategic sectors, such as transport, energy and capital markets, in order to boost national productivity.

The Board members approved USD 150 million for the “Belgrano Sur Railway Renovation Project, Section M – Tapiales/Marinos del Crucero General Belgrano – Phase II,” a second, USD 100-million installment for the “Regional Power Transmission Program in the Province of Buenos Aires,” and an additional USD 150 million for the “Capital Market Development Program for Productive Financing.”

“We are an ally when it comes to Argentina’s sustainable development, and CAF offers through these funds not only a financial contribution, but also knowledge and experience in transport and power transmission infrastructure, as well as in issues related to financial inclusion of micro, small and medium-sized enterprises in the capital market, in order to boost productivity and improve the well-being of the population, based on a global and long-term vision,” said Luis Carranza, CAF’s executive president.

Belgrano Sur Railway - Phase II

The project’s goal is to modernize the Belgrano Sur railway (FCBS) in order to improve mobility and connectivity of transportation services between the Southwest corridor of the Buenos Aires Metropolitan Region (RMBA) and the central area of Buenos Aires (CABA). To this end, the second installment – totaling USD 150 million for the FCBS – includes the complete renovation of Section M, between the Tapiales and Marinos del Crucero General Belgrano stations, focusing on tasks such as refurbishing of rails (47 km); duplication of railway tracks (6 km); complete signaling of the section; renovation or revamping of 25 level crossings; remodeling of the Marinos del Crucero General Belgrano station; and the improvement of the urban facilities around Aldo Bonzi station (18,000 m² of areas including sidewalks, streets and green areas), among others.

Likewise, the loan will fund the participation of external specialists who will contribute to the Project’s implementation or the conceptualization of improvements in mobility and transport of the RMBA, as part of the design and implementation of the future Regional Railway Network (Red de Expresos Regionales, RER). CAF’s funding will directly impact productivity in the railway passenger transport sector and accessibility and social inclusion of the target population, one of the lowest socio-economic groups within the Buenos Aires metropolitan area. Finally, in addition to funding the project, CAF will provide extensive and supplementary non-financial assistance, including a set of cross-sectional actions that will enhance the expected benefits.

Improving the power transmission system in the province of Buenos Aires

The “Regional Power Transmission Program in the Province of Buenos Aires” includes feasibility studies and the construction of high-voltage transmission infrastructure, which is required to meet the growing demand and relieve overload in the provincial main power supply grid. Similarly, the project is expected to strengthen the institutional capacity of the executing and technical support units of the Ministry of Infrastructure and Utilities in the Province of Buenos Aires.

The Program will receive funding from CAF in the amount of USD 100 million, and will increase efficiency and reduce power supply costs in one of the most populated regions in the nation. The expected benefits include an improved power system operability, which will increase transformation capacity; the phase-out of diesel-powered generation, which will lead to a significant reduction in operating costs and environmental impact; and the improvement of quality of service indicators.

Development of the Capital Market for Productive Financing

CAF’s USD 150-million installment will support the Ministry of Finance in implementing the Law on Productive Financing (Ley de Financiamiento Productivo, LFP) through freely available budget funds. The LFP promotes financial inclusion of micro, small and medium-sized enterprises in the capital market, encourages domestic savings and subsequent long-term investments, while empowering the capital market’s regulating entity.

The “Capital Market Development Program for Productive Financing” is in line with the strategies of the Argentinian government to promote financial inclusion of all sectors of the economy, and strengthening of institutional and regulatory frameworks governing productive financing and the capital market.