CAF Advances Sustainable Development with a $5.2 Billion Lending Plan

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CAF -the development bank of Latin America and the Caribbean- approved a plan of 5.2 billion in credits for 16 operations in 10 countries in the region, which will be allocated to infrastructure projects, climate action, human development, urban mobility, and energy transition. Additionally, the institution announced at the end of June its expansion in Central America and the Caribbean, including Guatemala and Saint Lucia, converting Barbados to a member country, and increasing capital for Antigua and Barbuda.

The funds approved by CAF will be used for the modernization of critical infrastructure, such as Chile’s railway network and aqueduct systems in Argentina; to promote energy transition with projects like the Chichas Solar Plant in Bolivia and the modernization of the electrical sector in the Bahamas; to strengthen climate action and environmental conservation, such as the biodiversity program in Colombia and forest management in Panama; to improve essential social services, including mental health in Colombia and prison systems in Peru; to promote sustainable mobility in cities like Bogotá and Lima; and to support small and medium enterprises in Paraguay, facilitating their access to financing.

This initiative has been termed “historic” by Sergio Díaz-Granados, executive president of CAF, who acknowledged during the approval that “CAF has never approved so many credit operations, nor such a high amount for financing”: “This shows that the institution is filling financing gaps and is consolidating as the leading multilateral in promoting progress and well-being for all citizens. Moreover, the inclusion of Guatemala and Saint Lucia expands our geographical reach and will allow us to deepen regional integration,” he said.

Regarding the incorporation of new countries, the Board’s approval marks the formal start of the process for Guatemala and Saint Lucia to become shareholders. As shareholders of Series “C”, both countries will have access to CAF’s financial, technical, and knowledge services, designed to support their development priorities and improve the quality of life for their populations. This further strengthens CAF’s relationship with Central America and the Caribbean, reaffirming the bank’s commitment to the sustainable and inclusive development of the region.

Here are some of the operations approved by CAF’s board:

• Improvement of the aqueduct system in the Province of Chubut, Argentina. The loan for this program amounts to 150 million dollars. This initiative will directly benefit the cities of Sarmiento, Comodoro Rivadavia, Rada Tilly, and Caleta Olivia.
• Construction of the Chichas Solar Plant in Bolivia. CAF approved funding of 110 million for the development of this initiative, a renewable energy project that reinforces Bolivia’s commitment to energy transition and environmental sustainability.
• Modernization and expansion of Chile’s railway network. In a decision reaffirming its long-term commitment to sustainable infrastructure development in Chile, the board approved a second phase of funding of up to 700 million to the State Railways Company (EFE).
• Support to reform the energy sector in the Bahamas. This is the first financing, of 100 million, that the country has received since becoming a CAF shareholder and will support the modernization of electrical infrastructure, the expansion of renewable energy, and improve affordability and energy resilience for Bahamian households and businesses.
• Boosting climate action in Colombia. This country will receive a loan of 350 million dollars to finance the Climate Action, Sustainability, and Biodiversity Support Program and assist the government in its comprehensive strategy against climate change, environmental protection, and biodiversity, as well as promoting sustainable finance. This program will strengthen the country’s capacity to tackle climate challenges while preserving its invaluable natural heritage.
• Improvement of access to mental health services in Colombia. CAF approved a loan of 150 million to enhance access and quality of mental health services in the Andean country. It will also prioritize primary care and reduce gaps in guaranteeing health rights for vulnerable populations, rural areas, and historically excluded communities.
• Support for Aerocivil’s Investment Plan in Colombia. CAF approved a corporate loan of 240 million dollars, aimed at modernizing air navigation infrastructure and airport services in priority regions of the country. The new infrastructure will strengthen Colombia’s key role in intraregional flight operation connectivity and enhance area integration among Latin American countries.
• Improvement of urban mobility in Bogotá. CAF approved a loan of 200 million to finance sustainable mobility projects in Bogotá, as part of the District’s Investment Plan. These resources will specifically support the initiatives of the District Development Plan 2024-2027 Bogotá Camina Segura, which aims to improve the quality of life for citizens through a safer, more inclusive, and sustainable mobility system.
• Improvement of forest management in Panama. CAF approved a credit of 300 million to improve forest management and support the continuation of policies that promote sustainable forest management, ecosystem conservation, and green financing.
• Sustainable infrastructure projects throughout the region. CAF approved a non-revolving credit line of 250 million to partially finance the investment plan of the Sacyr Group in sustainable development projects in CAF member countries. The financing can be allocated to various initiatives such as construction of sustainable infrastructure, drinking water and basic sanitation projects, social infrastructure (hospitals and educational centers), waste management solutions, circular economy, green businesses, and financial inclusion, among others.
• First green credit from CAF, in Costa Rica. CAF approved an operation of up to 500 million in the first green liquidity line approved by the institution.
• Historic program to modernize the justice and prison system in Peru. CAF approved a credit line of 800 million to finance the Improvement and Gap Closure Program of the National Prison System in Peru, the most ambitious of its kind in South America, aimed at radically transforming the conditions of people deprived of liberty in the country.
• Support for small and medium enterprises in Paraguay. CAF approved the renewal and increase of the revolving and uncommitted credit line in favor of the Financial Development Agency of Paraguay (AFD) for up to 100 million, doubling the current amount.
• Expansion of access to natural gas in Lima and Callao. CAF approved a loan A/B of up to 500 million for Gas Natural de Lima y Callao (Cálidda). Cálidda is Peru’s main natural gas distribution company and currently provides access to a cleaner, safer, and more economical energy source for approximately 9 million Peruvians.