CAF, AFD Sign USD 150 Million Credit Line for Climate Change Mitigation in Latin America
Projects aligned with Sustainable Development Goals and that enhance climate resilience in Latin America and the Caribbean will be eligible to access financing at more favorable rates, in addition to technical support and non-reimbursable funds to improve planning, thanks to the joint work between AFD and CAF.
The French Development Agency (AFD) established a third line of credit to CAF—development bank of Latin America—for EUR 150 million aimed at combating climate change. Investments will prioritize climate change adaptation projects, and are expected to increase climate resilience in countries where the action of both institutions converges.
This line of credit allows CAF to access financing on favorable terms to underpin projects in the region aligned with Sustainable Development Goals and the strategy of both organizations. To date, a number of green initiatives have already been jointly identified in Bolivia, Brazil and Ecuador, in multi-sectoral interventions including water and sanitation, energy efficiency, urban mobility, health, tourism, among others.
In addition, the line of credit is supported by non-reimbursable AFD funds for EUR 800,000 for design of projects with the same purpose of the facility, which is an additional contribution to the technical cooperation fund currently managed by CAF.
CAF has mobilized AFD funds by co-financing USD 760 million since 2011, with channeling monies across three lines of credit totaling more than USD 530 million, as well as managing technical assistance resources through schemes such as the LAIF facility and AFD-CAF Technical Cooperation Fund for EUR 7 million and EUR 1.7 million respectively. The funds of this cooperation have fueled large projects in countries such as Argentina, Bolivia, Brazil, Colombia, Ecuador, Mexico, among others.
The signing of this third line of credit further reinforces the robust collaboration between AFD and CAF, which additionally includes schemes such as project co-financing, managing of technical assistance resources, joint work on specific issues, knowledge transfer, joint participation within the framework of the International Development Finance Club (IDFC), among other strategies, with the common goal of generating an impact on the sustainable development of the countries of Latin America and the Caribbean.
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