LAIF in detail
The Latin America Investment Facility (LAIF) is a financing mechanism aiming at mixing grants with loans of multilateral or bilateral public European Development Finance Institutions and Regional Latin American Banks.
LAIF operates through financial grants (non refundable contributions) combined with loans from the finance institutions and using a broad range of measures:
• Investment co-financing in public infrastructure projects.
• Loan guarantee cost financing.
• Technical assistance (financed as part of a specific investment operation or as a global envelope made available to eligible finance institutions).
• Risk capital operations (financed as part of a specific investment operation or as an envelope made available to eligible finance institutions).
The functioning of the LAIF programme is based on the following structure:
• The LAIF Strategic Board discusses and defines the strategy, the sectoral priorities and the selection criteria for LAIF interventions. It is also in charge of studying annual activity reports for the examination of the facility's effectiveness, results and impact. The board is composed of the European Commission and the EU member states. Latin American countries and the eligible finance institutions and Latin America regional banks participate as observers.
• The LAIF Operational Board examines the project pipelines on the basis of projects presented by eligible Finance Institutions and decides on financing for projects.
• The Finance Institutions Group (FIG) is the advisory body in charge of analysing project proposals and advising the Operational Board.
• LAIF Secretariat: the meetings of the Operational Board and of the Finance Institutions Group are prepared and organised by the LAIF Secretariat located within the European Commission. The LAIF Secretariat is also in charge of implementing the decisions of the Operational Board.
LAIF modus operandi
The applications for LAIF grants are submitted directly, after agreement by the beneficiary country, to the European Commission by the European finance institutions providing financing to an eligible LAIF project. The lead finance institution presents the project for approval to the LAIF governing bodies.
In particular the projects are selected by the Finance Institutions Group (FIG) from a pipeline established from the list of operations submitted by the Finance Institutions for a possible financing from the facility.
The LAIF's grant award procedure is then based on the approval by the Operational Board of the projects selected by the Finance Institutions Group.
The final beneficiaries of the LAIF are the Latin American countries, directly or indirectly through their central, regional and local administrations; and the Latin American private sector, in particular SMEs.
The coordinated contacts of the European Finance Institutions and the European Commission departments ensure that the projects proposed fully contribute to the achievement of the national strategies in Latin America.
More information about how LAIF works [148 KB] .