CAF approves USD 200 million to boost climate action in the Dominican Republic

March 07, 2024

This is the first sovereign credit CAF has approved for the Dominican Republic after having increased its participation in the institution and becoming a member.

The CAF Board - the development bank of Latin America and the Caribbean -, meeting for the first time in the Dominican Republic in the presence of the President of the Republic, Luis Abinader, reiterated its commitment to the sustainable development of the country by approving a USD 200 million loan to foster climate action and resilience to the impacts of climate change.

This is the first sovereign credit CAF has approved for the Dominican Republic after having increased its participation in the institution and becoming a member. This operation will promote activities to boost climate action in public sector management and to promote territorial resilience and a just transition to low-carbon development.

“We know that CAF has a track record of success, as this financial body's main goal is to drive economic and social growth in the countries of the region through the financing of sustainable development projects. Many projects have been promoted in numerous countries with immense benefits for their people. For the Dominican Republic, this is a strategic alliance in our mission to improve the quality of life of our citizens,” said Luis Abinader, President of the Dominican Republic.

“We are very pleased to hold the CAF Board for the first time in the Dominican Republic and bring good news for its people with resources to support policies that promote a sustainable development model that combines economic growth with adaptation to climate change. As the green bank and of sustainable and inclusive growth in Latin America and the Caribbean, we are a strategic ally to help improve the quality of life for all Dominicans,” said Sergio Díaz-Granados, Executive President of CAF.

The resources, aligned with the Sustainable Development Goals (SDGs), aim to expand climate action in public sector management; strengthen regulatory capacities to promote resilient use of the territory; and encourage a just transition of the economy to a low-carbon development.

Through the Minister of Finance, José Manuel Vicente, the country takes over the Presidency of the CAF Board for one year, succeeding the Minister of Economy and Finance of Peru, José Arista. In 2023, the Dominican Republic joined as a member of CAF, moving from having Series C shares to Series A, and the country's representative office was inaugurated, where the Tourism Directorate is also based.

During the CAF meeting, the first credit line to the Bank of Development and Exports (BANDEX) was signed for an amount of up to USD 40 million, to promote women-led companies, the development and improvement of industrial parks in free zones, and greater access to financing in strategic sectors, among others.

In the presence of President Abinader, CAF and IDB signed for the first time an agreement to jointly promote key areas such as the co-financing of regional projects, security and citizen justice, knowledge dissemination, and sustainable plastic management.

At the Board, the historic figures reported by the bank in 2023 were presented, when CAF reached a historic high of approvals for USD 16.261 million; total assets of USD 53.814 million; a net profit of USD 810 million; and equity of USD 14.730 million, 7.4% higher than recorded in 2022. Last year, Chile, the Dominican Republic, and Honduras became full members.

This expansion and financial solidity were recognized by rating agencies with the highest rating issued to CAF, as well as by investors who oversubscribed to a record of 45 bond issues in various international markets totaling approximately USD 6.500 million. Furthermore, USD 4.298 million in third-party resource mobilization was achieved for the region, representing a 190% increase compared to 2022; and positively impacted the lives of millions of Latin Americans and Caribbeans.