CAF adds allies to promote a fair energy transition in the region

July 01, 2024

In a highly relevant event, organized by the Undersecretariat of Finance of the Government of Mexico, CAF - development bank of Latin America and the Caribbean, participated in order to continue exchanging ideas for the necessary evolution that multilateral financing for the development in the region.

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“The role of Multilateral Banking in regional economic growth, the formation of regional value chains and the fair energy transition”, was chaired by Gabriel Yorio, undersecretary of Finance and Public Credit, who received Alexia Latortue, undersecretary of the Department of United States Treasury and Renata Vargas Amaral, Undersecretary of the Ministry of Planning and Budget of Brazil.

On behalf of CAF, Emilio Uquillas, corporate country manager of CAF, participated in this forum; Antonio Silveira, Vice President of Private Sector and Manager of Infrastructure and Energy of CAF, who agreed that it is time to increase cooperation between multilateral development banks (MDB), local development banks and the governments of the countries, with the in order to face the challenges posed by climate change and the fight against poverty and inequality.

Two joint statements were signed during this forum. CAF was a signatory of the Joint Declaration for the Just Electrical Transition, through Emilio Uquillas, and together with Gabriel Yorio and Juliette Grundman.

“As a development bank, we are committed to developing innovative financial and technical tools to help the region reduce its carbon footprint and the emission of polluting and greenhouse gases, without neglecting its social development challenges, to enable a transition to the use of clean, green, sustainable energy and mitigating climate change,” said Emilio Uquillas.

The second joint statement was in favor of promoting transparency and corporate governance in MDBs, and was signed by Gabriel Yorio, Alexia Latortue and Renata Amarat.

The magnitude of the challenges in Latin America makes it essential to seek greater transparency and cooperation between MDBs, as well as a better exchange of information with national governments, with the aim of delivering resources more efficiently to public and private entities. .

During this forum, progress was shown on the Americas Partnership for Economic Prosperity project, promoted by the United States Department of the Treasury, and executed by the IDB. This nearshoring project or friendshoring focuses development efforts on three main axes: strategic minerals that support the energy transition, such as lithium and graphite; the medical equipment and pharmaceutical industry, as well as semiconductors.

Mexico is one of the countries with the greatest advantages for investing in the aforementioned sectors and will be the first in which the second phase of the project will start.

For his part, Antonio Silveira presented CAF's experience in energy transition projects in high-tech areas such as green hydrogen energy storage and gas, where he highlighted our financing to for the development of the design of the Lithium battery plant .

Emilio Uquillas, meanwhile, highlighted the importance of multilateral banks influencing the capacities of small municipalities, the subnationals that reach the people. “Our vision is to bring resources from international markets and finance the investment of member countries. Our main auditor is the market.”

“Today it is necessary to increase coordination, because multilateral agencies cannot provide what countries need with their isolated efforts. The fair energy transition is one of the most important challenges we have, because we must carry out decarbonization to combat climate change, but that these efforts promote equity in our countries and, why not, generate an industrial recovery in Latin America” , concluded Antonio Silveira.

The forum also included the participation of Gisela Sánchez, president of the Central American Bank for Economic Integration (CABEI); Amanda Glassman, executive advisor to the President of the Inter-American Development Bank (IDB); María Fabiana Jorge, executive director of the US at the IDB; Marcelino Madrigal, head of the IDB Energy Division; Juliette Grundman, director for Mexico, Cuba and Central America of the French Development Agency (AFD) and the general director of International Financial Organizations of the Ministry of Finance, Manuel Orrantia.