CAF approves US$3.43 billion to boost Latin American development and economic recovery

In order to continue supporting the 19 countries that make up the institution in their process of economic and social recovery from the impacts of the pandemic, the Board of Directors of CAF - Latin American development bank - approved the incorporation of Mexico as a full member of the entity; this will represent for the country greater access to long-term financial resources, as well as technical cooperation for sustainable development, among other benefits. For CAF, this strengthening of its assets will enable it to sustain the bank's operational growth so that it can continue to maximise its impact on countries' development and on improving the population's living conditions. 

During the CLXX session of the Board of Directors, it was also approved to begin consultations for a new process of strengthening equity, which will offer shareholder countries greater access to credit. This action will enable the institution to play an even more important counter-cyclical role without affecting its ability to continue providing long-term financing for investment projects that promote sustainable development, social inclusion and regional integration.  

Committed to the economic and social recovery of Latin America and the Caribbean, the Board approved a new regional counter-cyclical facility of up to $1.2 billion for utilities providing electricity, gas and water services. This facility seeks to address the increased liquidity needs of borrowers generated by the COVID-19 pandemic. It will also help ensure that these companies do not commit the resources needed to develop critical infrastructure for the countries, as a key element in boosting growth in the region. 

"CAF is an unconditional partner in the development of Latin America, and proof of this is the rapid, timely and diverse way in which we have supported member countries in their financing needs caused by COVID-19. We continue to finance key areas of development such as infrastructure, essential public services and fiscal stability," said Luis Carranza Ugarte, Executive President of CAF. 

At the last Board meeting in 2020, a total of US$2.23 billion was also approved for the following loans: 

• Argentina: US$544 million in three loans were approved. The first, of US$244 million, will help complete digital connectivity in areas of difficult access in Argentina by developing and building the ARSAT-SG1 geostationary satellite system in Argentina to provide satellite broadband services. The second, of 100 million, will go to the "Santa Fe + Conectada" Digital Inclusion and Educational Transformation Programme, which aims at expanding and modernising the connectivity system infrastructure in the Province of Santa Fe.  The third is the Municipal Infrastructure Development Programme Phase 1 for 200 million. These initiatives will improve the quality of life of 12 million people in Argentina. 
• Costa Rica: USD 500 million for the Programme of Support to the Emergency generated by the COVID-19 pandemic in the country, which will provide freely available and rapidly disbursing resources to strengthen the public sector budget to meet the demand for priority funds to accompany the Government's strategy to mitigate the impact of the health crisis and promote economic recovery. 
• Ecuador: The institution approved two loans totalling USD 462 million. The first, for $242 million, is for the Logistics Infrastructure Programme, Phase I, which will promote the development of specialised logistics infrastructure for the modernisation of multimodal transport and strengthen logistics corridors throughout the country. The second is 220 million for the Programme of Investment and Support for Provincial Decentralised Autonomous Governments in Territorial Economic Development.  
• Peru: Two operations were approved for a total of US$724 million. The first, up to $350 million, will contribute to the timely implementation of public resources to mitigate the impact of the health crisis, promote economic recovery and expand the portfolio of financial instruments with the aim of diversifying sources of funding to ensure the State's response capacity in the face of adverse events. The second, of 374 million, will be allocated to the Road Infrastructure Programme for Regional Competitiveness (PROREGION 1), aimed at improving and conserving 4,948 km distributed along 18 road corridors.