LAIF - Latin America Investment Facility
The Latin America Investment Facility (LAIF) encourages beneficiary governments and public institutions to carry out essential investment in Latin America. The programme was officially launched in May 2010.
Considering the challenges faced by Latin America to finance key infrastructures, the need to develop cutting-edge technologies, to be more competitive and to perform more effectively in global markets in order to boost potential to grow and reduce poverty, the EU has decided to launch an investment facility for Latin America.
The Latin America Investment Facility (LAIF) is a financing mechanism aiming at mixing grants (non refundable financial contributions from the European Commission and other donors) with loans of multilateral or bilateral public European Development Finance Institutions and Regional Latin American Banks.
LAIF contributes to achieve the objectives of the DCI Regulation and the Regional Strategy for Latin America addressing the newly identified challenges such as climate change and its impact on the environment. The European Commission approved on 18 December 2009 the decision to create a Latin America Investment Facility (LAIF).
Pooling resources through LAIF will improve the coordination and coherence of donor actions and thus directly contribute to the principles agreed by the Paris Declaration and by the Accra Agenda for Action.
The main purpose of LAIF is to mobilise additional financing to support investment in Latin America, encouraging beneficiary governments and public institutions to carry out essential investment, which could not be otherwise financed either by the market or by the development financial institutions alone.
In reaching its principal objective, LAIF will pursue three interconnected and mutually reinforcing strategic objectives:
• Improving interconnectivity between and within the Latin American countries, in particular establishing better energy and transport infrastructures including energy efficiency, renewable energy systems, sustainability of transport and communication networks.
• Increasing the protection of the environment and support climate change, adaptation and mitigation
• Promoting equitable and sustainable socio-economic development through the improvement of the social services infrastructure and support for the small and medium enterprises (SMEs).
Funding and budget
In the framework of the mid term review of the Regional Strategy Paper (RSP) for Latin America the European Commission has foreseen an amount of € 125 millions for the period 2009-2013.
In 2010 a commitment of € 34.85 million was available for grant. In 2011, an additional € 40 million were approved.