Joint effort with KfW to promote sustainable economic development in Latin America
- The two institutions signed an agreement under which the German development bank grants a US$195 million line of credit for the Climate Change Mitigation Program.
- The projects supported involve clean and alternative energy, integrated water resources management, and sustainable management of forest resources.
18 de March de 2012(Montevideo, 18 March 2012.) - Enrique García, president & CEO of CAF - Latin American development bank - signed a Framework Cooperation Agreement with Rüdiger Hartmann, director of KfW Entwicklungsbank (German Development Bank), and Christoph Sigrist, head of the Energy and Economic Development Division, to promote projects that contribute to climate change mitigation. CAF will allocate a concessional line of credit for US$195 million granted by KfW to the Climate Change Mitigation Program. The funds are part of the Climate Change Program for EUR 303 million structured by CAF, KfW and the European Commission in the framework of European and German financial cooperation with Latin America for the benefit of the shareholder countries of the Latin American development bank. Highlighting the institution’s role as effective bridge between the region and the world, the CAF chief said "CAF and KfW have had a close relationship since 1977, thanks to which many projects have received support in favor of regional integration and sustainable development in Latin America." The KfW director emphasized the importance of CAF as a strategic partner in promoting the sustainable economic development of Latin America. "By promoting climate-related infrastructure investments, KfW and CAF are contributing to mitigation and adaptation to climate change, along with environmental protection." The program, promoted by KfW and CAF, supports projects related to renewable energy generation, energy efficiency, environmental protection in industry, mobility and energy efficient transport, measures to adapt to climate change and ecological development in urban centers. Development banks join efforts against climate change The intention of the two institutions to deepen the relationship of complementarity for promoting sustainable development in Latin America is reflected in this line of credit for environmental projects, which is complemented by other products and initiatives including the Cooperation Agreement signed in Montevideo. Specifically, a line of credit is planned for water treatment and solid waste management projects and work is going ahead jointly to create a program, with financing and non-reimbursable technical cooperation, to increase forest reserves of carbon in the Amazon Region. Another important area is co-financing for energy efficiency projects that are already in appraisal stage, aimed at diversifying the power generation mix by generating new renewable energy. CAF and KfW are also completing the structuring of a Euro 6.5 million facility from the LAIF initiative (Latin American Investment Facility of the European Commission) to implement an innovative guarantee scheme for projects financed by CAF involving carbon emission reduction and environmental improvement. LAIF supports countries in the region in combating poverty and improving the environment; its efforts are aimed at achieving economic growth with social cohesion under a sustainable development model. Additionally, CAF and KfW, as founding members of the International Development Finance Club (IDFC), will be making joint efforts to position IDFC and its activities in the vanguard of the international community. The Club was founded to develop mechanisms of action, mobilize financial resources and transfer knowledge, as well as stimulating joint cooperation on development issues. The Club is based on the longstanding excellent relations among the 19 national, subregional and regional development banks in Africa, Asia, Europe and Latin America. KfW Entwicklungsbank is a competent and strategic advisor on current development issues. Its main objectives are poverty reduction, securing peace, and co-designing globalization. On behalf of the German government it supports reforms, infrastructure and financial systems to achieve socially and ecologically compatible economic growth. As a member of KfW Bankengruppe (KfW Banking Group) it is a worldwide financing partner for development projects. For more information visit www.kfw-entwicklungsbank.de/EN_Home/index.jsp