UNCTADMULTI-YEAR EXPERT MEETING ON INTERNATIONAL COOPERATION:

SOUTH-SOUTH COOPERATION AND REGIONAL INTEGRATIONFourth session

Geneva, Palais des Nations, Salle XXVI, 24-25 October 2012

Mr. Germán RíosCAF Development Bank of Latin America

CAFDevelopment Bank of Latin America

The views expressed are those of the author and do not necessarily reflect the views of UNCTAD

CAFDevelopment Bank of Latin America

Germán RíosDirector, Strategic Affairs

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.

Regional integration

Sustainable economic development

What is CAF?

CAF’s vision of Sustainable Development

Investment in all forms of capital

Competitive insertion in the global economy

Quality of institutions

Productive transformation

CAF: From Andean Institution to Development Bank of Latin America

1990 2000 2011

• Bolivia

• Colombia

• Ecuador

• Peru

• Venezuela

• Bolivia• Colombia• Ecuador• Peru• Venezuela

• Argentina

• Brazil

• Panama

• Paraguay

• Uruguay

• Costa Rica

• Chile

• Jamaica

• Mexico• Dominican Rep.

• Trinidad and Tobago

• Argentina• Bolivia• Brazil• Colombia• Ecuador• Panama• Paraguay• Peru• Uruguay• Venezuela• Costa Rica• Chile• Jamaica• Mexico• Dominican Rep.• Trinidad and Tobago

• Spain

• Portugal

5 countries 16 countries 18 countries

Products and services

• Loans– 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

1970-1996 1997-2001 2002-2006 2007-2011

430465

1.074

1.266

1991 1996 2001 2006 2011

845

2.727

5.575

8.191

15.093

1991 1996 2001 2006 2011

5761.043

1.826

3.693

6.351

1970-1991 1992-1996 1997-2001 2002-2006 2007-2011

4.761

10.60113.274

20.363

44.323

Growth in operations (USD millions)

Approvals Loan portfolio

Disbursements

Shareholders’Equity

Support for strategic sectors

2011: Loan portfolio by sector

Productive sector11%

Social sector17%

Other activities8%

Infrastructure64%

Clients

• Governments 

• Sub‐national governments

• Corporations:

• Publics

• Privates

• Joint ventures

• Financial institutions 

• SMEs

2011: Total portfolio by country

Geographic distribution of portfolio

Technical cooperation and other non-refundable funds

Use of Special Funds 2007‐2011: USD 204.8 mill

Main source of infrastructure financing in Latin America…

Approvals in infrastructure(USD mill)

18.856

24.64825.474

BM BID CAF

2000‐2010

IADBWB

18,856

24,64825,474

... and also in energy

Approvals in energy(USD mill)

5.520

6.519

9.103

BM BID CAF

2000‐2010

IADBWB

5,520

6,519

9,103

CAF: Growing source of overall multilateral             financing for Latin America

Approvals 2011:USD  25.661 mill

Approvals 2007‐2011:USD  135.600 mill

Approvals 1990:USD  10.658 mill

IADB

IADB41%

WB

WB

IADB43%

WB

Efficiency(Adm costs/Loan portfolio)

Profitability(ROE)

Satisfactory financial indicators

Asset Quality

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Moody'sS&PFitchJCR

CrisesMexico

Asia

RusiaBrazil

ArgentinaA2/A

A3/A‐

Baa1/BBB+

Baa2/BBB

Baa3/BBB‐

A1/A+

Aa3/AA‐

Ecuador

Ongoing crisis

CAF: ratings1993‐2011

Consistent improvement in ratings, even during financial crises

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-Southcooperation

• 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