CAF's Board of Directors approves by consensus to strengthen the institution's capital with 7 billion dollars
The Board of Directors of CAF -Development Bank of Latin America- approved by consensus the resolution of the tenth equity strengthening of the institution, the largest in its history, with a capital increase for a total amount of 7 billion dollars. This constitutes a vote of confidence by the institution's shareholder countries in the value proposition presented by management to turn the multilateral organisation into the Bank for economic reactivation and the Green Bank of Latin America and the Caribbean in the next decade.
In the last 30 years, CAF has increased the size of its portfolio nearly 50 times and has become an important ally and strategic partner for the development of Latin America and the Caribbean. With this new capital contribution, the institution will be able to double its portfolio by 2030.
"This equity strengthening is a great achievement of consensus among Latin Americans and Caribbeans. We are united to promote an institution that is firmly committed to the economic recovery of our countries and the well-being of their people. This is the largest capital contribution in the history of our Bank, and the fact that it is being made at the complex time we are experiencing as a result of the global pandemic is a great demonstration of our countries' commitment to one of their main assets for development. I am grateful for the support of the Board of Directors and reiterate CAF's decision to be an agile bank focused on Latin America and the Caribbean," said Sergio Díaz-Granados, Executive President of the institution.
The agenda proposed by CAF to support the reactivation and development of its shareholder countries, reinforced with this capital increase, will focus on the following areas of action: financing public and private investment programmes and projects; mobilising third-party resources and redirecting its financing to the private sector; countercyclical budget support; knowledge management and technical assistance; adopting a digital transformation agenda; and strengthening the focus on gender, diversity and inclusion.
Likewise, to become the Green Bank of Latin America, CAF will allocate USD 25 billion over the next five years for operations that help countries in the region to increase climate resilience, promote energy transition, achieve low greenhouse gas emissions growth, and strengthen the conservation of natural ecosystems and biodiversity. In this way, the institution's green finance will increase from 24% in 2020 to 40% in 2026, and all its operations will be aligned with the objectives of the Paris Agreement.