The Latin America Investment Facility (LAIF) is one of the European Union’s regional blending facilities, aiming to mobilize funding for development projects by combining EU grants with financial resources from European and regional financial institutions, governments and the private sector.
The purpose of LAIF is to help Latin American countries finance projects in key sectors that are essential for the achievement of the Sustainable Development Goals, such as energy, environment, water, transport, social services, and support to small and medium-sized enterprises (SMEs).
LAIF has three main interconnected and mutually reinforcing strategic objectives:
The program allows the European Union to engage in projects that would have been outside the scope of conventional development cooperation instruments, in a region where an increasing number of countries are looking for different approaches, innovative instruments and new forms of tailored support for investment.
HOW DOES LAIF WORK?
LAIF sets up partnerships putting together grants and other resources from the EU, and using them to leverage loans from multilateral and bilateral European finance institutions (AECID, AFD, EIB, KfW) as well as from regional and multilateral development banks (CABEI, CAF, IDB). These resources are often pooled together with contributions from partner countries and beneficiary institutions in Latin America.
The Commission and the Member States decide whether to approve funding, following the criteria based on development impact (SDGs), additionality (added value and leverage) and innovation.
Implementation of both the LAIF grant component and the credit component is managed by the corresponding European development bank. Project follow up is assured by the European Delegation in each country, and supported by LAIF at the headquarters.
