Argentina has become a full member of Latin American grouping Corporaci Andina de Fomento (CAF). The new capital contribution agreed will be US$543mn which, added to the US$100mn subscribed previously, brings Argentine participation to a total of US$643mn. Callable capital for a total of US$126mn will also be established.
“This decision is a milestone in the institutional life of the corporation. Argentina will be the first country to become a full member under the recent amendment to the CAF establishing agreement which permits Latin American and Caribbean countries that are not members of the Andean Community to accede to this category on conditions similar to those of the founding countries”, says CAF president and CEO Enrique Garcia.
Full membership for Argentina will expand CAF’s financing allocation in favour of the country, making possible new approvals for substantial amounts for economic and social infrastructure projects, as well as support for micro, small and medium-sized enterprises in public and private sectors. It will also give an important boost to the regional integration process.
A US$300mn loan agreement coincides to partially finance the Rinc Santa Mara-Rodrguez Electricity Interconnection Project, to be executed by the Argentine secretariat of energy of the ministry of federal planning, public investment and services.
This project is the seventh operation that the multilateral financial organisation has approved for Argentina. In the last three years, CAF has approved loans for investment projects in favour of this Argentina for some US$1.3bn, especially Road Integration Corridors Program, Phase I (US$150mn); La Picasa Rail Viaduct and Sector Strengthening (US$35mn); Rehabilitation and Paving of El Pehuenche International Pass (US$80mn); Comahue-Cuyo Electricity Interconnection (US$200mn); Argentina-Paraguay Integration Road Works which are part of the Yaciret Termination Plan (US$110mn); Expansion of Energy Transport Capacity in Buenos Aires Province (US$45mn); and now the US$300mn loan recently signed.