Download Banco Centroamericano de Integración Económica

CABEI Special Fund for Social
Transformation in Central America
(FETS)
Central American Bank for Economic Integration
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Special Fund for Social Transformation in Central America
• FETS was created in November, 1999 by CABEI’s Board of Governors
as the Bank’s soft window that offers concessional financing to HIPCs.
• Honduras and Nicaragua are eligible to receive financing through FETS.
• With the creation of FETS, CABEI has joined the efforts of the
international community to improve the living conditions of the region
through the provision of concessional financing, which linked to the debt
relief assistance being provided under the HIPC Initiative, will contribute
towards the achievement of the region’s poverty reduction goals.
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Special Fund for Social Transformation in Central America
CONCEPT
• Special “Window” offering concessional financing for Programs and Projects
related to Central American country-led poverty reduction efforts.
MAIN OBJECTIVES
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To improve social and living conditions of Central American families.
To boost international competitiveness within the Region.
To provide proper assistance in order to meet population basic needs.
To help combat enviromental deterioration and depletion of natural resources.
To foster civil society participation in the beneficary countries.
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Special Fund for Social Transformation in Central America
CAPITALIZATION
USD MM
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CABEI - yearly allocations from net income
European Union – donation
Denmark – donation
Other sources
49.5
22.2
5.2
16.9
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Special Fund for Social Transformation in Central America
MAIN CHARACTERISTICS
Financing Modalities
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Soft Credits
Trust Funds
Co financing Programs
Donations
Other Financial Mechanisms of interest to the Donor Community.
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Special Fund for Social Transformation in Central America
APPROVALS AND DISBURSEMENTS
Approvals
Country
(USD
MM)
2002
Disbursements
(USD
MM)
2003
2004
2005
2006
Total
Honduras
52.4
3.7
4.2
10.1
0.8
1
19.8
Nicaragua
41.9
0
2.8
3.9
7.3
9.6
23.6
Total
94.3
3.7
7
14
8.1
10.6
43.4
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Special Fund for Social Transformation in Central America
MAIN BENEFITS
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Integrates funds from different sources for common goals (multiplier
effect).
Guarantees the sustainability of a continuous flow of concessional
resources.
Ensures the visibility of the different contributions.
Includes a number of mechanisms to identify, manage, implement,
monitor, evaluate and measure the impact of its programs and
projects.
Reduces the cost of granting and managing resources for donors
which do not have a strong presence in the Region.
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Special Fund for Social Transformation in Central America
MAIN CONSTRAINS
• Scarce concessional resources within the international
donor community.
• Great investment needs in HIPC countries when
compared to CABEI’s limited capacity to allocate funds
from its net income.
• Capitalization structure. Does not incorporate
replenishments.
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Special Fund for Social Transformation in Central America
LEVERAGE MECHANISM
•
It provides concessional funds that can be leveraged through a
mixture with CABEI’s ordinary resources.
Approved
Amount
Type Of Resource
USD MM
%
FETS
94.43
53.2
CABEIs Balance Sheet
82.88
46.8
177.31
100
Total
Average Leverage Ratio
(Total to FETS)
1.9
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Special Fund for Social Transformation in Central America
CABEI/IADB Joint Initiatives in HIPC Countries
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Public Sector / Nicaragua:
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Currently discussing the possibility of cooperating on the financing of long term
projects.
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Focus on Renewable Energy (USD 50.5MM) and Health (USD 75MM).
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Under the proposed scheme, IADB would provide concessional funds that
would be leveraged through a mixture with CABEI’s ordinary resources.
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Joint efforts in order to explain the structure to the Nicaraguan Government
(“one single package”).
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Special Fund for Social Transformation in Central America
CLOSING REMARKS
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CABEI does not have its own “concessional funds”, but over the years has
developed strong ties with governments, cooperation agencies, and
development banks willing to channel concessional funds through CABEI.
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CABEI has demonstrated strong commitment towards poverty reduction
and debt relief efforts.
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CABEI has developed mechanisms to efficiently use concessional funds
and continue financing HIPCs.
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CABEI is determined to keep its “franchise value” for HIPCs.
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