UNCTAD
MULTI-YEAR EXPERT MEETING ON INTERNATIONAL COOPERATION:
SOUTH-SOUTH COOPERATION AND REGIONAL INTEGRATION
Fourth session
Geneva, Palais des Nations, Salle XXVI, 24-25 October 2012
CAF
Development Bank of Latin America
Mr. Germán Ríos
CAF Development Bank of Latin America
The views expressed are those of the author and do not necessarily reflect the views of UNCTAD
CAF
Development Bank of Latin America
Germán Ríos
Director, Strategic Affairs
What is CAF?
CAF is a leading multilateral financial institution that mobilizes resources from international markets to Latin America and the Caribbean, to provide multiple banking services to both public and private clients in its shareholder countries.
Sustainable economic development
Regional integration
CAF’s vision of Sustainable Development
Investment in all forms of capital
Productive transformation
Competitive insertion in the global economy
Quality of institutions
CAF: From Andean Institution to
Development Bank of Latin America
1990
2000
2011
• Spain
• Portugal
• Bolivia
• Colombia
• Ecuador
• Peru
• Venezuela
5 countries
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Bolivia
Colombia
Ecuador
Peru
Venezuela
Argentina
Brazil
Panama
Paraguay
Uruguay
Costa Rica
Chile
Jamaica
Mexico
Dominican Rep.
• Trinidad and Tobago
16 countries
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Argentina
Bolivia
Brazil
Colombia
Ecuador
Panama
Paraguay
Peru
Uruguay
Venezuela
Costa Rica
Chile
Jamaica
Mexico
Dominican Rep.
Trinidad and Tobago
18 countries
Products and services
• Loans
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–
–
–
Short, medium and long term
Project finance
Structured finance
Co‐financing and A/B loans
• Equity investments, especially in capital funds
• Investment bank and financial advisory services
• Guarantees
• Treasury products
• Strategic programs Roles of a multilateral bank
• Financing – Catalytic role in financial intermediation
– Counter‐cyclical role in development finance – Assume risks that cannot be efficiently taken by the private sector
• Development of specialized knowledge and expertise – A comprehensive and thematic concept of development – Build a profound knowledge of regions and sectors
– Promote best practices
Growth in operations
(USD millions)
Approvals
Loan portfolio
15.093
44.323
8.191
5.575
20.363
13.274
2.727
10.601
4.761
845
1970-1991 1992-1996 1997-2001 2002-2006 2007-2011
1991
1996
2001
2006
2011
Shareholders’
Equity
Disbursements
6.351
1.266
1.074
3.693
430
1.826
465
1.043
576
1991
1996
2001
2006
2011
1970-1996
1997-2001
2002-2006
2007-2011
Support for strategic sectors
Clients
2011: Loan portfolio by sector
Productive sector
11%
• Governments Social sector
17%
Infrastructure
64%
• Sub‐national governments
• Corporations:
• Publics
• Privates
• Joint ventures
Other activities
8%
• Financial institutions • SMEs
Geographic distribution of portfolio
2011: Total portfolio by country
Technical cooperation and other nonrefundable funds
Use of Special Funds 2007‐2011: USD 204.8 mill
Main source of infrastructure
financing in Latin America…
Approvals in infrastructure
(USD mill)
BM
WB
IADB
BID
24,648
24.648
18,856
18.856
2000‐2010
CAF
25,474
25.474
... and also in energy
Approvals in energy
(USD mill)
BM
WB
BID
IADB
CAF
9,103
9.103
6,519
5,520
6.519
5.520
2000‐2010
CAF: Growing source of overall multilateral financing for Latin America
Approvals 2011:
USD 25.661 mill
Approvals 1990:
USD 10.658 mill
IADB
43%
IADB
WB
WB
Approvals 2007‐2011:
USD 135.600 mill
IADB
41%
WB
Satisfactory financial indicators
Profitability
(ROE)
Asset Quality
Efficiency
(Adm costs/Loan portfolio)
Consistent improvement in ratings,
even during financial crises
CAF: ratings
1993‐2011
Aa3/AA‐
A1/A+
Moody's
A2/A
Ongoing crisis
Argentina
Ecuador
A3/A‐
Baa1/BBB+
S&P
Fitch
Brazil
JCR
Rusia
Asia
2012
2011
2010
2009
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
2008
Crises
Mexico
2007
Baa3/BBB‐
2006
Baa2/BBB
CAF: An adaptable and flexible
institution
• Supported its member countries to capitalize the current favorable economic conditions
• Played a counter‐cyclical role in times of economic turbulence in international markets, and helped shareholders when financing become scarce
• Recognized as one of the best multilateral agencies in the region due to its capacity to adapt to a changing and challenging environment
CAF: Strong commitment by
member countries
• Shareholders have given the institution the autonomy to design and implement operational policies.
• Member countries have supported the institution continuously
• Never in CAF’s history has a member country defaulted on its obligation, even in times of dire financial difficulties
• Through its unique governance structure CAF prevents the conflicts that arise in other multilateral institutions where donors and recipients members are differentiated
CAF: A center of Latin American
knowledge
• Developed an active relationships with important international think tanks and participates in the main forums and events in and outside the region
• Designed and implemented several applied research programs, which provide best practices and policy advice in areas such as infrastructure, macroeconomics, environment and competitiveness
• A bridge between Latin America and the rest of the world, fostering partnerships and supporting a process of practical and intelligent international insertion. South‐South cooperation an integral part of CAF´s strategy CAF: Promoting South-South
cooperation
• Global Network of Export‐Import Banks and Development Finance Institutions (G‐NEXID)
– Promote and develop cooperation
– Knowledge creation according to the needs of the members – Information Sharing
• Active working relations with other south institutions: India Eximbank, China Eximbank, ADB, BNDES, CDB, etc. • Cooperation Agreement with Afreximbank
– Afreximbank‐CAF‐BLADEX seminar in Panama to discuss opportunities for LAC‐African cooperation
Final Remarks
Some lessons from CAF´s experience
•A shared comprehensive development agenda
•Regional essence
•Strong commitment by member countries
•Prudent financial policies and long‐term sustainability
•Non‐conditionality lending (partners in development)
•Reinvest profits in strategic programs to tackle mayor challenges
•Flexibility, adaptability and responsiveness •Autonomy and independence
Thank you