CAF and UKEF strengthening cofinancing efforts in Latin America and the Caribbean
October 03, 2023
Both organizations signed a letter of interest to promote joint initiatives in a wide range of areas, including renewable energies, energy efficiency, clean transportation, sustainable water and wastewater management, climate change adaptation, production technologies and processes, as well as green buildings, among others.
CAF, Development Bank of Latin America, and the United Kingdom Export Finance ("UKEF"), the UK's export credit agency, announce the signing of a Letter of Interest, establishing a framework for future cooperation for the financing of projects that involve the supply of UK and non-UK goods and services, thereby advancing sustainable development and economic growth in Latin America and the Caribbean.
UKEF intends to offer Direct Lending and Guarantees as cooperation mechanisms, with the primary objective of reducing and spreading the financing expenses for UK export buyers. Direct Lending involves UKEF providing capital to cofinance alongside CAF loans to overseas buyers. On the other hand, Guarantees would involve UKEF providing cover for financing provided by CAF or a commercial bank financing a project alongside CAF.
The sectors targeted by UKEF's funding initiatives encompass a broad spectrum of areas, including renewable energy, energy efficiency, pollution prevention and control, environmentally sustainable management of natural resources and land use, clean transportation, sustainable water and wastewater management, climate change adaptation, eco-efficient and/or circular economy adapted products, production technologies and processes, as well as green buildings.
This cooperative initiative extends to multiple countries, fostering partnerships and development in key regions. Currently, UKEF's focus spans across the Latin America and the Caribbean.
Tim Reid, CEO of UKEF, said, “I’m pleased to mark my first trip to Latin America as UKEF’s CEO by signing this Letter of Interest with CAF, one of the region’s leading development banks. This agreement will allow our two institutions to deepen our cooperation on co-financings across Latin America and the Caribbean, bolstering regional access to the UK supply chain and UK exporters’ access to a critical market.”
Gabriel Felpeto, Finance Vice President and CFO at CAF, said, "We are very pleased with this strategic alliance between CAF and UKEF because is aligned with the purpose of being the green bank and the economic reactivation in Latin America and the Caribbean with resources that improve the quality of life of the people and promote new opportunities in key areas of development in the countries of the region.”
For more than four decades, CAF has pursued a strategy of deepening its sources of financing through a network that currently has more than 90 global strategic alliances, which have placed it in a relevant and influential position in the region. The multilateral promotes sustainable development and regional integration through the efficient mobilization of resources for the timely provision of multiple, high value-added financial services to public and private sector clients in shareholder countries.