KFW and CAF will finance USD 298 million in health and energy programs to boost recovery in Latin America

Latin America will have more resources to advance the economic and social reactivation plans that the authorities are leading, through two new loans for up to EUR 245 million that the German Development Bank - KfW , granted, on behalf of the Federal Ministry for the Cooperation and Economic Development (BMZ) of Germany, to CAF - development bank of Latin America.

The loan contracts were signed on behalf of KfW by Claudia Arce, Director for Latin America and the Caribbean and Simon Erhard, Director of the KfW Agency for Peru, as well as on behalf of CAF by Gabriel Felpeto, Vice President of Finance and Gloria Gamero, Director of Institutional Financial Resources. The signing event was attended by Florian Theus, Head of the Development Cooperation Section of the German Embassy in Peru.

Committed to supporting the well-being and quality of life of the population, the German Financial Cooperation through KfW and CAF will allocate USD 115.6 million to finance under favorable conditions projects in the health and hygiene sector, aimed at mitigating adverse effects of COVID-19; likewise those programs that seek improvements in the public health systems of Latin American countries. This is the first phase of a program that is expected to continue in 2021 for an additional USD 188.6 million, with an expanded focus on vulnerable populations and SMEs in the region affected by the pandemic.

The other financing for USD 182.5 million will be directed to projects for the construction of electricity distribution and transmission networks with a climate focus. This energy transmission loan is an integral part of the energy efficiency and renewable energy program that CAF has had with KfW for more than 10 years.

At the end of the signing of this agreement, CAF's Vice President of Finance, Gabriel Felpeto , highlighted: “We continue working to attract resources at favorable rates to Latin America and the Caribbean at times when they are most needed; That is why we are pleased to announce these new loans with one of CAF's oldest partners. We hope that these resources will help us improve the well-being of the population and increase the competitiveness of the region”.

For her part, the director for Latin America and the Caribbean of the KfW , Claudia Arce, stated: “CAF is an important and strategic partner to face global challenges such as climate change. For KfW and the German financial cooperation it is important to continue this joint work and, at the same time, to be able to cooperate in alleviating the impact of the COVID-19 pandemic in Latin American countries”.

The director of the KfW Agency for Peru, Simon Erhard, highlighted: “Thanks to the presence of CAF and KfW with our respective regional agencies in Lima and our constant exchange, we have been able to make our excellent institutional relationships even closer. We are sure that due to this close coordination, we will be able to carry out several other important joint operations during the coming years that will help improve the lives of the population, the environment and economic conditions”.

The head of the Development Cooperation Section of the German Embassy in Peru, Florian Theus, highlighted: “Multilateral institutions like CAF are very important to be able to face the greatest international challenges of our time, such as climate change and the pandemic. of COVID-19. Therefore I am very happy that on behalf of the German Government we can support this objective today by signing the two loan contracts between KfW and CAF”.

In the last decade, CAF and KfW, commissioned by the German Government, have arranged concessional loans for more than USD 1,570 million, and in the last 5 years for USD 955 million to promote projects that the multilateral organization is financing in the region. Additionally, non-reimbursable resources and cooperation funds are added to promote pre-feasibility, feasibility and implementation studies of CAF projects in their initial phase, thanks to the support of the Ministry of Development Cooperation - BMZ of Germany and the Commission European through the Latin America Investment Facility (LAIF) initiative.