CAF-AM highlighted in Lima the role of development banks in financing infrastructure in the region

On September 18, at the Hotel InterContinental Real Lima Miraflores, Scotiabank organized the breakfast conference "Project Finance: Optimizing the financing of infrastructure projects". The event brought together leaders from the public and private sectors to analyze how development banking and commercial banking can be articulated in favor of strategic infrastructure projects in Latin America.

Panelists included José Salardi, former Minister of Economy and Finance of Peru; Juan Suito, advisor to the Executive Board of ProInversión; Gabriel Monje, Corporate CEO of Grupo Tramarsa; Alberto Ñecco, CEO of CAF Asset Management Corp (CAF-AM); Joswilb Vega, Chief Investment Officer of Profuturo; and Carlos Gómez, Director of Infrastructure and Project Finance LATAM & Caribbean of Scotiabank.

During his speech, Alberto Ñecco highlighted that development banking plays a catalytic role by assuming risks that commercial banks do not normally cover, such as financing terms of 15 to 25 years and certain regulatory risks. He pointed out that, since 2014 and with the creation of CAF-AM, CAF -development bank of Latin America and the Caribbean- has been mobilizing institutional savings towards infrastructure, consolidating six funds for a total of USD 2.1 billion in Colombia and Uruguay, and initiating its deployment in Costa Rica.

Among the key points for the creation of CAF-AM, Alberto Ñecco highlighted the need to channel pension savings into infrastructure, especially in social projects under project finance schemes that require payments in local currency and long terms. CAF-AM, as a specialized manager, seeks to close the exchange rate and term mismatch between project needs and available sources of financing.

The importance of balancing sustainability and speed of execution was also stressed. Ñecco warned that the most agile projects are those that incorporate social and environmental criteria from the beginning, reducing risks of paralysis and cost overruns. CAF-AM applies the CAF Safeguards and requires ESG alignment in all its funds; several of them, such as those that finance educational and transportation PPPs in Uruguay, now have the highest ESG rating.

Finally, the CEO of CAF-AM emphasized that the relationship between commercial and development banks is not one of competition, but of complementarity. While development banking assumes the initial risks, extends terms and offers institutional confidence, commercial banking amplifies investment and deepens the market. Examples in Colombia and Uruguay confirm how this synergy has made it possible to create new funds, attract international managers and consolidate a more sophisticated and resilient financial ecosystem to close the infrastructure gap in the region.