ICO grants $300 million loan to CAF, the Latin American development bank, to promote the internationalisation of Spanish companies
This is the first loan to be signed under the new ICO product for financing Spanish SMEs through the international banking system
CAF will channel this ICO financing through local financial institutions that work with this multilateral bank
The loan is for financing investment and liquidity, as well as medium and long-term exports.
The chairwoman of Instituto de Crédito Oficial (ICO), Emma Navarro, and the director for Europe at the Latin American development bank CAF, Guillermo Fernández de Soto, today agreed a $300 million loan to CAF to finance investment projects and liquidity requirements, as well as medium and long-term exports by Spanish companies to Latin American countries.
This is the first loan to be made under the new ICO financing programme using the international banking system. This transaction allows ICO to grant financing to CAF destined for companies in Latin America with Spanish capital. In turn, CAF will channel these funds through financial institutions in different Latin American countries that work with this multilateral institution.
The maximum loan amount to companies with Spanish capital, for investment or liquidity purposes, will be €12.5 million, while the maximum loan for exports will be €25 million (or its equivalent amount in the corresponding currency). Repayment and grace periods will be agreed between the local financial institution working with CAF and the beneficiary company with Spanish capital.
At the signing ceremony, ICO chairwoman, Emma Navarro, said, "This new financing method will allow ICO to continue to support the international expansion of Spanish companies, a central pillar of our activity, in line with the structural changes that internationalisation has brought to our economy".
For his part, CAF's director for Europe, Guillermo Fernández de Soto, said, "Spain is a key country for the region, not least on account of the strength of its companies and their experience in sectors that are so important for sustainable economic development in the countries in which CAF operates. At the same time, Latin America is a key region for Spanish businesses, accounting for a significant proportion of their profits. This is why today ICO is launching a $300 million credit facility, so that CAF, through banks in the region, can finance Spanish companies with at least 30% Spanish capital that wish to undertake investment projects in Latin America and the Caribbean".
The presence of Spanish companies in Latin America promotes competitiveness and productivity through improved quality standards and the exchange of knowledge and experiences brought about by having important global companies operating locally.
ICO's international lending activity has grown considerably due to its work in recent years, rising from 2% in 2012 to more than 35% in 2015.
ICO and CAF have worked together since 1998, through different agreements, with the aim of strengthening business relations between Spain and Latin America to promote the internationalisation of Spanish companies.
Note to editors
Instituto de Crédito Oficial (ICO) is a state-owned bank, constituted as a public corporation attached to the Ministry of Economy and Competitiveness. It has the legal status of a credit institution and acts as a state financial agency. As a state-owned bank, ICO grants loans and makes capital investments to finance investments and liquidity operations by companies in Spain and abroad, through intermediary financial institutions or via direct financing. As a state financial agency, ICO manages the official financing instruments that the Spanish state uses to promote exports and support development. More information at www.ico.es
CAF, the Latin American development bank, seeks to promote sustainable development and regional integration by financing public and private sector projects, providing technical cooperation and other specialised services. Established in 1970 and currently made up of 19 countries (17 from Latin America and the Caribbean, together with Spain and Portugal) and 14 private banks, it is one of the leading sources of multilateral financing and an important generator of knowledge for the region. More information at www.caf.com