Sustainable Finance
At CAF, we are committed to mobilizing capital for sustainable development through a variety of financial instruments. Our approach combines consolidated sustainable finance solutions with innovative structures that maximize impact and attract new sources of financing.
To provide greater clarity on our efforts, this section is divided into two key areas:
- Sustainable Finance Instruments - Highlighting our framework and initiatives aligned with global sustainability standards.
- Innovative Financial Instruments - Presenting pioneering structures designed to optimize financing for development, including a case study on an SLL executed in Mexico.
Sustainable financial instruments
Sustainable Finance Framework
Impact Reports
Second-party Opinion
Supporting Documents
Innovative sustainable products
In line with its corporate objective of consolidating its position as the Green Bank of Latin America and the Caribbean, as of the first half of 2023, CAF has made available to its shareholder countries a new financing modality called Comprehensive Loans Linked to Climate and/or Social Objectives, PIVOCS, which are equivalent to sovereign sustainability-linked loans (SLLs).
Pivocs contain at least 2 indicators each associated with a performance target (one of a climate nature and the other in the social sphere). Under this type of loan, once the targets established in the loan contract have been met and compliance is verified, the shareholder countries can access a reduction in the margin applicable to the operation of up to 30 bps for a period of up to 8 years. It should be noted that in the event of partial compliance, the borrower is eligible for a partial financial benefit, while if the performance targets are not met, the applicable margin would be that contemplated for an ordinary sovereign operation.
During the first week of March 2024, CAF's Board of Directors approved this loan modality for the first time in its history in favor of Mexico, in support of the “Program to boost the sustainable finance strategy of the Government of the United Mexican States”. This Pivocs was articulated on the basis of two performance metrics: (i) Mexico's Nationally Determined Climate Commitments and (ii) a female poverty reduction indicator. The operation was subscribed and fully disbursed (USD 300 million) in the first quarter of 2025.
