The EIB is granting a global loan of EUR 40 million to Corporation Andina de Fomento (CAF), a multilateral financial institution established in 1968. With this global loan, CAF will part-finance investment projects in various sectors of the economies of Latin America. To be eligible for financing, projects must bear a European interest. That is to say, the projects should involve subsidiaries of EU companies, represent joint ventures between EU companies and local firms, or contribute to the transfer of European technology and know-how. The EIB global loan will finance up to 50% of the investment cost born by the final beneficiary.
The loan illustrates the Bank's commitment to providing support to projects presenting a mutual interest for both the host county and the EU. Priority will be given to projects undertaken in the private sector, as well as to the financing of infrastructure aimed at fostering regional integration - key objective of EU policy in the region. The EIB's medium to long-term finance will encourage new investments and thus help to strengthen economic development.
The loan contract was signed today in Caracas by Ms Martín Castellá, EIB Vice-President responsible for lending in Asia and Latin America, and M. Enrique Garcia, CEO of CAF.
CAF is a regional multilateral development institution that promotes sustainable development and regional integration in its seventeen member countries in Latin America, Spain and the Caribbean. Its principal shareholders are the countries of the Andean Community: Bolivia, Colombia, Ecuador, Peru and Venezuela. The successful performance of CAF is based on self-sustainable profitability, the quality of its loan portfolio and a strong commitment to the established conservative financial policies.
In the past, CAF has gained significant experience of the financing of investment projects and has successfully managed loans from a number of multilaterals, including the EIB. CAF products and services are targeted at the governments of shareholder countries, public and private companies and financial institutions. Clear guidelines are strictly adhered to concerning environmental and social issues in the identification, appraisal and monitoring of all projects. As such, all investment projects financed under the EIB global loan will be required to comply with the relevant national legal framework for environmental protection.
The loan is provided in the context of the EU co-operation policy with third countries. In Asia and Latin America (ALA), the EIB may lend up to EUR 2.48 billion during 2000-2006 to support capital investment projects implemented by subsidiaries of EU companies or joint-ventures between EU and ALA firms, or investment that results in environmental improvements or fosters regional integration.
The EIB was set up in 1958 to finance investment furthering EU integration. It lends for regional development, infrastructure, energy, industry and environment. Outside the EU, the Bank contributes to the European development co-operation policy in some 130 countries in Central and Eastern Europe, the Balkans, the Mediterranean region, Africa, the Caribbean and the Pacific, Asia and Latin America.