The Japan Bank for International Cooperation (JBIC) signed on April 8 a loan agreement to establish a credit line totaling up to USD100 million (JBIC portion USD50 million) with CAF –Development Bank of Latin America, for renewable energy and energy efficiency projects in CAF's shareholding countries in the Latin American and Caribbean region, under GREEN operations.
The loan is cofinanced with Sumitomo Mitsui Banking Corporation and The Hachijuni Bank, Ltd., with JBIC providing a partial guarantee for the cofinanced portion. This loan follows a similar loan made to CAF in March 2011.
CAF, whose main shareholders are its 19 member countries in the Latin American and Caribbean region, aims to achieve economic integration, as well as to promote economic development and trade finance in the region. JBIC has built up a cooperative relationship with CAF over a period of more than forty years through JBIC loans for infrastructure projects, as well as for exports of machinery and equipment to the Latin American and Caribbean region and for industrial investment and export promotion in the region.
Major Latin American and Caribbean countries had announced climate actions they intend to take under a new international agreement ahead of the COP21, and have been taking vigorous steps to implement measures to cope with climate change. Amid these developments, CAF has been actively supporting environment-related projects with a focus on renewable energy and energy efficiency projects, and thus this credit line is expected to contribute to reducing GHG emissions in the Latin American and Caribbean region. This is also in line with an initiative announced by the Japanese government in December 2015, "Actions for Cool Earth: ACE2.0."