Latin America - LAIF - Promoting investment through the Latin America Investment Facility

Latin America - LAIF - Promoting investment through the Latin America Investment Facility

The main purpose of Latin America Investment Facility (LAIF) is to promote additional investments and key infrastructures in the transport, energy and environment sectors, as well as to support the private sector's development in Latin American countries.

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BACKGROUND

The Latin America Investment Facility (LAIF) was officially launched during the EU-LAC Summit in May 2010. The Facility is an innovative financial mechanism that combines grants (non-refundable financial contributions from the European Union) with other resources such as loans from Development Finance Institutions in order to leverage additional financing for development and increase the impact of EU aid.

Similar to the other EU blending facilities, LAIF acts as a catalyst to pool resources and improve the coordination and coherence of donor actions, thus conforming to the principles of ownership, partnership and shared responsibilities set out in the Paris Declaration on Aid Effectiveness and the subsequent Accra Agenda for Action and Busan Partnership Agreement.

GeogRaphical scope

The following Latin American partner countries are eligible for support from LAIF: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela, as well as regional projects.

IMPLEMENTATION

The contribution of the European Commission to LAIF is decided annually and the resources are made available from the EU’s Development Cooperation Instrument (DCI). The European Commission allocated to LAIF for the period 2009-2015 an overall amount of €270 million.

In coherence with the priorities established in the Multiannual Indicative Programme 2014-2020 for regional cooperation with Latin America under the DCI, LAIF interventions should focus indicatively on the following sectors: energy, agriculture, transport, environment, climate change, SMEs, information and communication technologies (ICT) and social services.

LAIF provides its support through:

  • Investment grants

  • Technical assistance

  • Risk capital and other risk sharing instruments

LAIF sets up partnerships, pooling grant resources from the EU and using them to leverage loans from multilateral and bilateral European Finance Institutions (such as AECID, AFD, EIB, KfW) as well as from regional and multilateral Development Banks (such as CABEI, CAF, IDB). These resources are often being pooled together with contributions from partner countries and beneficiary institutions in Latin America.

 

RESULTS

For the period 2010-2015, 28 projects were approved for grant financing of €232 million, representing total lending of approximately €5.4 billion and total investment cost of approximately €6.9 billion. The leverage effect of LAIF grant was thus in the range of 1:29.

More information can be found in the 2015 Operational Annual Report

See list of LAIF financed projects.

 

Additional documents: