CAF approved USD 14+ billion in 2022 to promote Latin America and Caribbean development

December 29, 2022

During 2022, the multilateral organization helped raise the voice of Latin America and the Caribbean and position the region as a key stakeholder in major global challenges such as climate change, digitalization, sustainable cities or the use of migratory flows.

Throughout 2022, CAF approved a total of USD 14.09 billion to fund development initiatives in Latin American and Caribbean countries. These funds targeted economic revival and the productive and financial sector, and focused, among others, on energy, transport and telecommunications, water and sanitation, environment and climate change, education and digitalization infrastructures. In line with the institution’s approach, the 2022 approvals will contribute directly to several Sustainable Development Goals.

In 2022, CAF’s Shareholders’ Meeting approved the largest capitalization in the institution’s history, for USD 7 billion, which will help the bank double its portfolio by 2030. The fresh funds will support the economic revival in shareholder countries, and will help consolidate the multilateral organization as the green bank of Latin America and the Caribbean. The asset growth will focus on helping CAF become the green bank of Latin America and the Caribbean; promote a just energy transition for the countries of the region; supporting subnational governments; promote regional integration and enhance the role of the private sector.

During the year, El Salvador, Chile and Costa Rica became full members of CAF, which will allow them to access new financial tools and instruments, technical assistance and knowledge generation for the public and private sectors in favor of the people, sustainable development and regional integration. In addition, CAF created a department for the Caribbean, which will facilitate greater Caribbean integration and provide agile and effective support to the region’s economic recovery.

The case of Chile is a clear example of CAF’s growing importance in the continent. The Andean country—one of the original founders of CAF—rejoined the organization as a full member and, after 45 years, will once again have access to financing lines and have voting power in the decisions of the organization.

“Chile rejoining as a full member is great news for the strengthening of CAF and its consolidation as a key stakeholder for Latin American development and integration. We are proud to work together with the Chilean government to promote the economic and sustainable growth of the country and the entire region,” said CAF executive president Sergio Diaz Granados.

“In a year characterized by high volatility in financial markets as a result of inflationary pressures, overall increases in global interest rates and various geopolitical conflicts, CAF showed excellent financial results, supported by its shareholders, which materialized through the largest capital increase in its history for a total of USD 7 billion. The main achievements include the upgrade in its S&P ratings to AA- and JCR to AA, Fitch’s outlook upgrade to positive, the raising of long-term funds for an amount close to USD 4 billion in 30 bond issues in 9 different currencies and the contracting of approximately USD 1 billion in various lines of credit, and expanding its presence in the securities markets in the U.S. and in Europe,” said Gabriel Felpeto, CAF’s Vice President of Finance.

Regarding the environment, CAF pledged to invest USD 1.25 billion to preserve the health of the oceans. Furthermore, CAF continued to work on the main lines of action to become Latin America’s green bank and support the countries of the region in their commitments to environmental conservation, preservation of natural ecosystems and energy transition. Over the next five years, CAF is set to mobilize a total of USD 25 billion to promote green growth in the region. This will raise CAF’s green portfolio from 24% in 2020 to 40% by 2026.

“These funds will allow us to implement a series of projects that offer innovative solutions to preserve biodiversity, enhance marine ecosystems and the blue economy, and improve the living conditions of people most exposed to the effects of climate change in Latin America and the Caribbean,” said Christian Asinelli, Corporate Vice President of Strategic Programming at CAF.

Another major initiative in 2022 was the creation of the BiodiverCities Network, which is helping make biodiversity conservation a central part of planning, land use management, and socioeconomic development of cities in Latin America and the Caribbean. By the end of 2022, the initiative had been signed by over 100 mayors of cities throughout the region.

With the purpose of raising the voice of the region, América Futura was conceived in 2022, an initiative led by El País and CAF that gives visibility to the global solutions originated in the region, the Latin American faces, ideas, achievements and projects with great potential to contribute to social and environmental sustainability.

In 2022, CAF also strengthened its role as representative of Latin America and the Caribbean in other regions through synergies with strategic partners such as the United States, Europe, China and the Middle East, and helped enhance the region’s integration into global decision-making forums. In this connection, the voice of Latin America and the Caribbean and its environmental, urban and digital solutions was brought to the Summit of the Americas, COP27, Ocean Summit, UN Assembly and World Urban Forum, among others.

In 2022, CAF also announced that in 2023 it will organize—during the Spanish presidency of the Council of the European Union (EU)—, a meeting between the 60 ministers of Economy and Finance of the EU and Latin Americans and the Caribbean, with the purpose of aligning interests, synchronizing development agendas, strengthening geopolitical ties and reinforcing trade relations between Europe and Latin America and the Caribbean.

“In the private sector, we approved a new strategy that will allow us to change the operating model, with direct and indirect operations, which will improve speed and quality in the management of operations. We also expanded support to national and sub-national development banks, focused more on de-risking operations, in order to mobilize third-party funds, including more guarantee operations, A/B operations and other unconventional instruments,” said Jorge Arbache, Vice President of the Private Sector at CAF.

Regarding production of knowledge, CAF published in 2022 a total of 112 studies that helped establish lines of analysis that promote the construction of fairer, more sustainable societies. These include EDR2022, entitled “Inherited inequalities,” which claims that, although in the region many people today surpass their parents in educational attainment, similar progress is yet to be made in terms of labor or income. It is an inertia-driven phenomenon rooted in the “cradle lottery.” Factors such as place of birth, household features, gender and belonging to a certain ethnic group, act either as a burden or a facilitator for success in life.

The CAF Marathon was also announced in 2022, also known as the Latin American and Caribbean Integration Marathon, which will return to Caracas on Sunday, March 19, 2023. The seventh edition of the main 42-km race in Venezuela will keep its traditional route and quality standards; it will open 3,000 places for the 42K modality and 5,000 for the 21K race.

Lastly, CAF made significant strides in the implementation of its new strategy to become the bank of economic recovery and the green bank, and thus support the region in the midst of an increasingly challenging macroeconomic environment for 2023 and towards the fulfillment of the Sustainable Development Goals by 2030. This strategy was presented at the first meeting of CAF officials held in October in Caracas.

“All CAF officials are committed to the objectives of helping economic recovery and becoming the green bank of Latin America and the Caribbean. To enhance the impact of our work, we are implementing internal measures to contribute to a positive organizational climate that continues to position us as one of the leading institutions for regional development,” said Carolina España, executive vice president of CAF.