Category: Structured Finance

Cabei, the Central American multilateral, has signed an MOU with Finnvera, the Finnish export credit agency to promote corporate activity from the Scandinavian country. Cabei will get credit guarantees from the Finnish government to improve financing for the public and private sectors in Central America. “Finnvera and Cabei have supported projects in Central America worth approximately $180m and are currently considering deals worth around $40m,” says Cabei.

The flattening of remittances flows to Mexico contrasts with the continued growth of money transfers to Central American countries, according to the IDB. Remittances to El Salvador, Guatemala and Honduras rose by an average of 11% during the first half of 2007, year-on-year. Mexican and CentAm migrants have similar demographics in terms of age, incomes and length of residence in the US. Most of them work in industries like construction, hotels, restaurants, food processing and agriculture.

Fewer Mexican emigrants are sending money back from the US, according to the IDB’s Multilateral Investment Fund (MIF). “The percentage of Mexicans who regularly make remittances fell to 64% in the first half of 2007, down from 71% last year,” says the MIF. The drop was the steepest in states where Latin American immigration is most recent, at 56% this year from an average 80% in 2006. The survey was conducted in June.

Santiago Levy Algazi, a former Mexican deputy minister of finance, is joining the IDB as chief economist and general manager of its research department. The academic and expert in social programs brings public sector experience to the bank in his roles as general director of the Mexican Social Security Institute, deputy finance minister, president of the Federal Competition Commission and director of the economic deregulation program at the trade ministry. He designed a conditional cash transfer program known as “oportunidades,” which assists more than 5m of Mexico’s poorest households. He also worked as a consultant to the UNDP on poverty reduction policies. Levy replaces Guillermo Calvo, who left the IDB to become director of Columbia University’s program of economic policy management.

The IDB has approved a $12.5m, fast-disbursing grant to support Haiti’s management of public sector resources. This grant, which will be disbursed in a single tranche, could be followed by a similar grant in 2008, says the IDB. The financing is for a broad range of projects in Haiti, with emphasis on basic infrastructure, such as highways and rural roads.

The Board of Directors of the Inter-American Development Bank (IDB) have approved its first private sector financing for a bioenergy project in Brazil for a total of US$120 million to Usina Moema Acúcar e Alcohol Ltda., a major sugar, ethanol and bio-energy producer based in the State of São Paulo, that is operating in one of the fastest growing industries in Brazil and worldwide. This operation is part of IDB’s initiative to promote the structuring of senior debt financing for five Brazilian ethanol production projects that will have a total cost of US$997 million. These investments will contribute to Brazil ‘s goal of tripling annual ethanol production by 2020.

The Goldman/ICA group has secured a commitment from Santander to provide financing for the $4.1bn toll road package. In April, The IDB pledged up to $400m for a partial credit guarantee to enhance bond or bank loans denominated in Mexican pesos for terms longer than 25 years. The package is for Maravatío-Zapotlanejo, Guadalajara-Zapotlanejo, Zapotlanejo-Lagos de Moreno, and León-Lagos-Aguascalientes tollroads.