|
CIFI Working Towards a Sustainable Future
|
|
Latin America and the Caribbean attracted at least $20 billion in renewable energy investments 2022. However, this only accounts for around 4% of the global total, underlining the pressing need to accelerate regional capital flow. This investment represents the most significant amount ever directed towards renewables in Latin American history. Forecasts indicate a rise in the near term due to existing demand, paving the way for numerous sustainable development business opportunities. The anticipated investment scope expands to other sectors like public transportation, green buildings, schools, hospitals, and sustainable tourism. One reason for this investment growth in renewables ties back to the commitment to adhere to the Paris Agreement and the Sustainable Development Goals.
This backdrop becomes pivotal in our CIFI Asset Management unit, particularly with the recent addition of investors contributing $138 million. These funds constitute the CIFI Debt Fund for Sustainable Infrastructure. This addition strengthens our position to support high-impact projects in the region.
The CIFI Sustainable Infrastructure Debt Fund is an investment vehicle geared towards financing sustainable infrastructure projects across Latin America and the Caribbean. The fund commences with its premier project in the distributed solar energy sector, backed by a senior loan of US$19 million.
Our collaboration with FINENGE and the Órigo Energía project underscores our commitment to Brazil, Latin America's economic powerhouse, boasting the highest percentage of renewable investments. It's worth noting that although approximately 650 million people inhabit Latin America, up to 2022, over 16 million individuals lacked access to electrical power, primarily due to their location in rural or remote areas where infrastructure expansion costs run high. This data originates from CEPAL's Sixth Report on Progress and Regional Challenges of the 2030 Agenda for Sustainable Development in Latin America and the Caribbean. We wish to emphasize that while our achievements are many, they would not be possible without the unwavering support of our collaborators, partners, and especially you, our valued readers. Your trust and endorsement drive us forward, challenging us to surpass hurdles and tirelessly work towards a brighter, sustainable future for our region. With deep gratitude and a renewed sense of optimism, we are thrilled to share these exciting updates with you.
Warm Regards,
César Cañedo-Argüelles
CEO
|
|
|
Financial Innovation for a Sustainable Future: The CIFI Debt Fund for Sustainable Infrastructure
|
|
Latin America and the Caribbean have experienced significant growth in the past decade. On average, clean energy investment in the region has rebounded strongly. According to the latest Bloomberg report, wind and solar generation projects accounted for nearly $20 billion, the second-highest in the region's history. In 2021, Brazil attracted the largest share of renewable energy investments with $13.2 billion, followed by Mexico with $3.2 billion and Chile with $1.3 billion. Other regional nations like Panama also showcased significant strides in hydroelectric, wind, and solar sector development. In this context,
CIFI Asset Management (CIFI AM) spearheads sustainable high-impact projects through the CIFI Sustainable Infrastructure Debt Fund. Our aim isn't merely to pursue financial returns and invest in the region's communities and environment.
|
|
|
Hence, we're channeling funds towards vital sectors such as renewable energy, energy efficiency, telecommunications, healthcare, and education. We've achieved a successful initial close of $138 million and aspire to reach a total investment of $300 million. These figures exude confidence in our approach and reflect the region's potential. According to the Economic Commission for Latin America and the Caribbean (ECLAC), investments should be encouraged to boost renewable energies and increase energy services and universal access infrastructure, generating green jobs and new revenue streams. ECLAC estimates that investing an equivalent of 1.3% of the regional annual gross domestic product (GDP) over a decade to universalize access to electricity from renewable sources would lead to the creation of 7 million green jobs, infrastructure modernization, and regulation updates to attract investments.
|
|
|
|
We conclude with an invitation to infrastructure investors and developers:invite infrastructure investors and developers to join us in our mission to build a prosperous and equitable future for all, capitalizing on the unique opportunities the region offers.
|
|
|
|
The Renewable Energy Horizon in the Region
The future of investment in the Latin American and Caribbean region stands at a crossroads filled with positive opportunities and challenges.
Opportunities:
Growing Clean Energy Demand: With a population exceeding 650 million, the region's energy demand will continue to rise. This context, combined with the global commitment towards a low-carbon future, positions Latin America and the Caribbean as a burgeoning market for renewable energies. However, despite advancements regarding the increase in the renewable energy proportion, the regional energy matrix remains reliant on fossil fuels, exposing vulnerability to external geopolitical shocks, particularly for hydrocarbon-importing countries. CEPAL emphasizes that due to the conflict in Ukraine, a pronounced rise in oil, gas, and coal prices ensued, showcasing the fragility of secure and affordable energy access, especially in hydrocarbon-importing countries and those with a limited energy diversification and low renewable energy ratio.
Resource Diversity: The region boasts rich biodiversity and natural resources, from Mexico and Brazil's wind potential to Central America and the Caribbean's geothermal energy. As per CEPAL estimates, by 2032, Latin America's electrical capacity expansion, guided by renewable sources and within a regional integration scenario, will require 47 gigawatts of photovoltaic solar generation and 75 gigawatts of wind generation.
Challenges:
Infrastructure Strengthening: CEPAL suggests that to cater to the region's escalating requirements, about 5% of its annual GDP should be invested in infrastructure. Given the vast room for innovation, job creation, and local economic stimulation through infrastructure investment, this challenge presents a lucrative opportunity for investors and developers.
The majority of the 16.1 million people unconnected to the electricity grid in the region (OLADE, 2022) reside in rural or remote areas, where the costs of expanding the network and infrastructure are high. This poses a significant challenge to universalize clean and affordable energy access as outlined in SDG goal 7. The regional scenario is heterogeneous, with certain countries where up to 15% of the rural population lacks electricity access. Globally, fossil fuel subsidies persist; every minute, coal, oil, and gas receive approximately $11 million in subsidies.
The enthusiasm exhibited by investors in the CIFI Sustainable Infrastructure Debt Fund bears testimony to the confidence in the region's potential. At CIFI AM, we are committed to this future, anticipating many more to join us on this shared mission. ECLAC, in one of its most recent analyses, concludes that the new renewable energy industry, distributed and grid-tied, electromobility, and green hydrogen, emerge as a transformative engine for the region's economy, thereby contributing to sustainable development, ensuring no one is left behind.
CIFI Sustainable Infrastructure Debt Fund Linkedin article
|
|
Finalists in GRI Infra Awards - Andean
It's an honor that our endeavors have been spotlighted at the GRI Infra Awards Andean. We've participated in this award in the following categories:
|
|
Power Award for Clean and Affordable Energy Access:
This award acknowledges a project and/or initiative wherein a company or organization has successfully developed and implemented strategies ensuring universal, reliable, modern, and affordable energy services, significantly elevating the share of renewable energies in the energy matrix and modernizing the technology for the region's energy service supply.
Atmosphere Award for Decarbonization and Circular Economy:
This award recognized a project and/or initiative in which a company or organization developed and executed actions that significantly curtailed emissions and attained carbon neutrality by modernizing their production units and enhancing process efficiency across various infrastructure areas like energy, mobility, and transport. This also included incorporating recycling and reuse technologies, thereby contributing to the energy transition of Andean countries.
|
|
Portfolio of Solar Energy Under PMGD Scheme in Chile by CIFI:
In 2005, Chile's transition towards a green economy initiated the "Small and Medium Distributed Generation (PMGD)" incentive program for renewable energy generation projects. PMGD projects are geographically proximate to direct consumers, have minimal environmental and social impact, decrease fossil fuel consumption and greenhouse gas emissions, bolster energy security, and optimize the use of the country's resources, especially solar. Foreign investment participation has capitalized on Chile's robust legal framework and the vast PMGD business opportunity.
Since 2020, CIFI has established a comprehensive client portfolio in Chile, where solar projects under the PMGD scheme possess structured, agile, and efficient financing to deliver a financial product to this renewable energy sector segment. This model has been replicated 10 times.
PMGD project portfolios are particularly interesting in Chile, where 10 companies with 53 plants have been funded. One of the most ambitious projects boasts a 24-plant potential. The PMGD companies funded by CIFI in Chile generated over 130,000 MWh in 2022, equivalent to saving emissions of more than 55,000 tons of CO2eq that year, alongside numerous other environmental and social benefits.
|
|
|
CIFI's Climate Change Strategy:
Since 2019, CIFI has been developing a Climate Change Strategy to align with the Paris Agreement's targets towards a 1.5°C maximum temperature rise horizon. In this regard, we've created tools to estimate emissions and environmental impact and have outlined a climate change strategy targeting 2030 and 2050. This strategy emphasizes allocating funds to low-carbon projects and progressively excluding high-emission sectors.
As a result of these endeavors, the carbon intensity of our investments (tCO2e per USD MM) has reduced by 77% from 2019 to 2022, and our carbon footprint (tCO2e) has diminished by 42%. In a region representing over 112 million people through Andean countries, a unique opportunity exists to innovate in sectors like infrastructure and energy. Our recognition in the Power and Atmosphere categories testifies to our unwavering commitment to the region.
|
|
|
CIFI at the 8th Latin American Ports Forum: Shaping the Future of Regional Maritime Logistics
|
|
|
|
Panel members on "Port and Logistic Sector Financing"”
|
|
|
CIFI proudly served as a panelist at the 8th Latin American Ports Forum, which took place on September 6th and 7th, 2023, at the Marriott W Hotel in Panama City. This esteemed event convened vital leaders and innovators steering the region's logistical future.
Representing us on the "Port and Logistic Sector Financing" panel was Antonio Araúz, CIFI's Director of Structured and Corporate Finance, delving into pivotal financing trends in this rapidly evolving sector. It was an unparalleled opportunity for investors and banking professionals to gain strategic insights and establish valuable connections.
Being pioneers in the financial and logistical domain at CIFI, we understand the necessity to lead discussions shaping the regional logistical future. Araúz shared visions for the region's maritime logistics future and contributed innovative solutions.
|
|
|
|
From left to right: Steven Rothberg - Mercator International, Johana Gomez - IDB Invest, Antonio Arauz - CIFI
|
|
|
Business Inspiration: Úrsula Burns Headlines ADP's Annual Conference, with CIFI as a Prominent Sponsor
|
|
|
The Association of Directors of Panama (ADP) hosted its annual conference graced by the illustrious presence of Úrsula Burns, former CEO and Chairman of Xerox's Board of Directors, as the keynote speaker in her talk titled 'UNLEASHING BOARD - CEO DYNAMIC FOR ORGANIZATIONAL SUCCESS.'
|
|
|
|
This prominent event occurred on Wednesday, September 13th, 2023, at the Sheraton Grand Hotel, Panama.
Burns, a founding partner of Integrum Holdings and the Chairwoman of Teneo Holdings, stands out in the business world. She earned the distinction of becoming the first African-American woman to lead a Fortune 500 listed company. This feat ranked her 22nd among the world's most powerful women by Forbes in 2014.
Drawing from her solid values and profound respect for human dignity, Burns has adeptly navigated intricate international business scenarios and has positively influenced organizations across various industries. During her conference engagement, she emphasized the importance of considering diversity in experiences when forming exceptional boards. Additionally, she highlighted the need for directors to clearly understand their strategic and governance roles, as they play a vital role in providing positive support to CEOs managing daily organizational operations. Her insights and expertise bestowed invaluable perspective on the event.
For CIFI, sponsoring this event is a source of immense pride. Our team members' active presence further reinforced our commitment to promoting gender equality and leadership in the corporate sphere. Úrsula Burns' involvement inspired all attendees and left an indelible mark on the conference.
|
|
|
Once more, CIFI is part of the iconic Latinex event. This year, we're celebrating the 50th General Assembly and Annual Meeting of the FIAB and the Latinex 2023 Investors Forum.
This premier event gathered brilliant minds and visionary leaders in the investment field to explore exciting opportunities in Latin America. Over two days of interaction, networking, and discussion, esteemed experts shared their wisdom and experiences, granting a deep understanding of current and future market trends.
|
|
|
|
Neila Urriola – Director of Treasury and Augusto Beruti – Origination Officer
|
|
|
Panama History Festival: Building Identity Through Education and Culture
|
|
|
CIFI is honored to sponsor the First Panama History Festival. This event takes attendees on a time-traveling journey from 1903 to 1914, scheduled from September 26th to October 1st, 2023, at La Manzana de Santa Ana.
The festival will feature four thematic pavilions designed as tram wagons. Each will focus on specific facets of this formative period for the Republic of Panama. CIFI has eagerly sponsored the "Culture and Immigration" pavilion, highlighting one of the most influential social phenomena shaping Panamanian DNA.
The "MusicHistFest SXX - To the Rhythm of the New Republic" stood out as a featured event, with a concert that took place on September 28th under Maestro Luis Carlos Pérez Quintero's direction. This musical journey connected attendees with Panama's rich cultural heritage.
At CIFI, we wholeheartedly supported initiatives promoting education and culture, recognizing their significance for sustainable development and strengthening community identity.
|
|
|
|
Panama History Festival, Roberto Hurtado, festival director.
|
|
|
|
History Festival visits collaborators
|
|
|
|
|
