March 14, 2017

The Council of the Andean Development Corporation (CAF, for its acronym in Spanish) approved this Tuesday in Panama the financing for 130 million dollars for the second stage of the Río Colorado – Bahía Blanca Aqueduct Project. The Chief of Cabinet, Pablo Quirno, and the Undersecretary of International Financial Relations, Félix Martín Soto, participated in the CLIX Board of Directors Meeting.

The approved Project will be executed by the Province of Buenos Aires and the CAF will be financing the 80%. The local contribution will be of 32.22 million dollars, amounting to a total of 162.22 million dollars. In addition, the 15-year loan includes a 54-month grace period.

This infrastructure investment consists in the building of a new system of water provision for the population and industry of Bahía Blanca and nine nearby locations. This way, this second stage completes the first stage of the project which has already been financed by the CAF with 150 million dollars.

Likewise, the comprehensive Project is comprised by a 140-km aqueduct that connects the cities of Pedro Luro and Bahía Blanca. It also includes an intake work and a purification plant in Pedro Luro, four cistern tanks and two pumping stations. According to the data calculated by the Province of Buenos Aires, the agreement will benefit 450 thousand residents of the region and it will provide the necessary infrastructure for sustainable growth in the industrial sector.

In addition, the CAF Board of Directors Meeting held this week in Panama was the last one presided over by Enrique García, Executive President of the organization as from 1991, and he will be replaced by the new elected President, the Peruvian Luis Carranza.

The CAF is a development bank, founded in 1970 and comprised by 19 countries and 13 private banks of the region, that promotes a sustainable growth model through the support of public and private-sector projects in Latin America. Within this framework, the Shareholders Meeting is its governing body, in charge of approving the annual report of the Board of Directors, the financial statements properly audited, and determining the allocation of the profits earned.

The National Government has obtained the SEC’s authorization to improve the access conditions to Argentine bonds by U.S. investors, after completing the pertinent information procedures. The SEC is the public entity that regulates the securities market of the United States. This authorization allows Argentina to expand the universe of U.S. investors beyond the qualified institutional investors. The registration before the SEC provides a quality seal of the information standards stipulated by Argentina for its investors at a global level.

Offers begin today, March 13, 2017, and end on April 11, 2017, 5 PM, New York time, with an extension option. In that case, the new deadlines for offers will be duly informed.

Eligible bonds to be replaced are the Global 6.250% maturing in 2019; 6.875% maturing in 2021; 7.500% maturing in 2026; 7.625% maturing in 2046; 6.625% maturing in 2028; 7.125% maturing in 2036; 5.625% maturing in 2022; and 6.875% maturing in 2027.

The Minister of Finance, Luis Caputo, opened today the 5th edition of the Argentine Economic Congress, within the framework of the Argentine Exhibition on Economy, Finance and Investment, 2017 EXPO EFI, carried out today and tomorrow at the Hilton Hotel in the City of Buenos Aires.
Before investors and businessmen, the Finance Minister gave a speech entitled Opportunities and Challenges of a New Cycle and he said that: “it is inevitable to analyze where the country was a year ago” and he recalled the highlights of the agreement entered into with holdouts in the beginning of 2016.

“Thanks to that, today we are financing at the lowest nominal rates of our history”, Caputo highlighted. Likewise, he said that “if the dispute hadn’t been solved during the first quarter of the year, it would have been very hard to implement the historical restoration for retirees, and if we hadn’t eliminated the capital controls and the deductions, we wouldn’t have had a record wheat harvest”.

Within that framework, Caputo said that the objective of his team is “to develop the necessary financial conditions in order to motivate growth and credit”, and he added: “If we want a sustainable and balanced growth, we have to enable the productive sector and SMEs to have access to credit at reasonable rates”.

Mr. Minister highlighted the work done by his Ministry to coordinate the financial policies of the public bank and to strengthen the local capital market. “We are going to boost credit at better rates and longer terms, and it is not a prediction, we are already doing it”, the Finance Minister said and he added: “We are working together with Minister Frigerio to grant loans for housing, through Banco Nación, of up to 30 billion pesos, with up to 30-year terms, always having competitive rates as a reference”.

In addition, Caputo said that “currently we have a very small capital market compared to Latin-American countries. Our objective is to increase domestic savings, and in particular for SMEs that are the source of employment”. He also highlighted the importance of “encouraging people so they can start thinking on medium and long-term savings” and he emphasized “the creation of the new closed investment funds that will allow investment in infrastructure, real estate development, and renewable energy”.

Finally, Caputo said: “We know the path is long, but we also know we are in the right path. We are working so that every day we can be closer to the country we have all dreamt of”.
2017 EXPO EFI has more than 170 speakers in 85 conferences, as well as 36 workshops led by experts and directors of different companies and financial institutions that will give their points of view on the economic and financial context. Organizers estimate that more than 10,000 people will participate of the event this year.

The International Bank for Reconstruction and Development (IBRD), original institution of the World Bank to assist developing countries, approved this Monday two projects for 400 million dollars to improve the quality of life and housing for more than 110,000 Argentinians. On Tuesday, it subscribed a guarantee for 480 million dollars to promote investment in renewable energy.

On this matter, the Minister of Finance, Luis Caputo, said: “This guarantee is an example of the actual benefits for the Argentine people to achieve investment and financing for productive projects and for the development of infrastructure; in this case it is for a strategic area such as renewable energy”.
In the first place, the International Organization approved on Monday, February 27, the financing for two projects which are part of the 2016-2019 National Housing Plan. The first one, with an approved amount of 200 million dollars, is aimed at transforming informal urban settlements of the Metropolitan Area of Buenos Aires. The purpose of this project is to invest in infrastructure for Villa 31, located in the City of Buenos Aires, and for Villa Carlos Gardel in Moron.

Said initiatives consider an investment of 170 million dollars for Villa 31 aimed at the improvement of the access to basic services (drinking water, sanitation, storm drains, public street lighting, electricity grids), and at the construction of 1,200 houses and the relocation of families that currently live below the Illia Freeway. Other 30 million dollars shall be allocated to Villa Carlos Gardel with the same objectives.

This way, the Project will benefit more than 48,200 people by means of a 29-year loan with a grace period of 6 years. In addition, the Province and the City of Buenos Aires will contribute 42.5 million dollars.

Likewise, the IBRD also approved the financing of 200 million dollars for the Comprehensive Housing Project to buy formal houses for those who do not have access to them. It aims at the improvement of the living conditions of inhabitants of poor settlements in Great San Miguel de Tucuman, Great Cordoba, Great Mendoza, Palpala in San Salvador de Jujuy and Mar del Plata – Batan.

This loan will make available the benefits from the “Solución Casa Propia” Program of PROCREAR, thus complementing the savings for the first house. The Project also aims at the improvement of services and public urban spaces and at the perfection of housing administration in federal, provincial and local bodies.

The 32.5-year loan with a 7-year grace period will benefit 3,000 families that will have access to their first formal house and 18,000 residents of poor settlements.

Finally, on Tuesday, February 28, the IBRD Board of Directors approved the provision of a 480-million dollar guarantee for up to 20 years for the FODER, aimed at the financing of sustainable energy investment. Within the context of the RenovAR Program of the Ministry of Energy and Mining, the objective of this program is to provide greater predictability to the private initiative in electric generation from renewable sources.

Caputo, as Argentine Governor before the World Bank, said that this guarantee “shows the reliability Argentina has achieved before multilateral credit organizations since the beginning of Macri’s Administration and the joint work of the Ministry of Energy and Mining and the Ministry of Finance and the World Bank to achieve the objectives of providing renewable energy for the country”.

This Project is part of the environmental agenda of the country and strengthens a cleaner energy matrix that allows the reduction of carbon emission. This way, the objective is that the 8% of the energy production for this year and the 20% for 2025 comes from renewable sources. Within this framework, Argentine Law No. 2791/15 of Renewable Energy created the FODER to promote the generation of wind, solar, biomass, biogas energy, and small hydro-electric projects.

FODER contributes to the building of confidence of national and foreign investors in Argentina. IBRD’s guarantee has a multiplier effect that attracts investment for 3.2 million dollars to the renewable energy sector in Argentina (6.7 times the amount of the guarantee).

Therefore, we develop closer ties with the World Bank as strategic partner of Argentina, organization that continues assisting the country through long-term financing for infrastructure projects.