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Corporacin Andina de Fomento (CAF) and the Netherlands Development Finance Company (FMO) have signed a cooperation agreement during the IMF-World Bank annual meetings in Washington, DC. The cooperation enhances the effective and efficient use of development sources in Latin America. This will result in better access to financial services for the private sector.
The cooperation agreement has been signed by executive president Enrique Garc­a of CAF and CEO Arthur Arnold of FMO. “Together we have 70 years of experience in promoting sustainable development in Latin America as both CAF and FMO were established in 1970’”, Garc­a states.
The cooperation agreement establishes the formal relationship between CAF and FMO to identify, evaluate, structure and supervise credits for private sector companies and projects in Latin America. Says Arnold: “The CAF-FMO agreement creates an attractive investment climate for the private sector which is the engine for growth.”
Private infrastructure projects, large and mid-size corporations and financial institutions will benefit from increased access to acceptable terms of financing and substantial loan volumes.
CAF and FMO will develop strategies and initiatives in the field of financing for mid-size corporations, through the development of local currency financing alternatives and risk-sharing structures and partnerships with local financial institutions. Because the cooperation between CAF and FMO targets to align the appraisal process of both institutions, the private companies and projects will benefit through shorter process time and lower costs. The credits extended by CAF and FMO as part of the agreement will carry similar terms and conditions. Furthermore, CAF and FMO will develop joint initiatives to assist eligible companies in improving their corporate governance and their environmental and social management.
The Netherlands Development Finance Company (FMO) is the international development bank of the Netherlands. FMO invests risk capital in companies and financial institutions in developing countries. FMO’s investment portfolio is €
2bn and FMO is one of the largest bilateral development banks worldwide. Thanks in part to its relationship with the Dutch government, FMO is able to take risks which commercial financiers are not – or not yet – prepared to take. FMO states its mission to create flourishing enterprises, which can serve as engines of sustainable growth in their countries.
Corporacin Andina de Fomento (CAF) is a multilateral financial institution, recognised internationally for its performance, efficiency, soundness and professionalism. Its mission is to promote the sustainable, balanced and harmonious development, and integration and competitiveness of the Latin American region through the efficient raising of financial resources. The main shareholders are the member countries of the Andean Community: Bolivia, Colombia, Ecuador, Peru, Venezuela together with Argentina, Brazil, Chile, Costa Rica, Dominican Republic, Jamaica, Mexico, Panama, Paraguay, Spain, Trinidad & Tobago, Uruguay and 16 private banks from the region.