CDB, Mexico announce Fund to boost regional infrastructure
The Caribbean Development Bank (CDB) has entered into a Memorandum of Understanding with the Government of Mexico’s development bank, Banco Nacional de Comercio Exterior (Bancomext), acting as the Trustee of the Infrastructure Fund for the Countries of Mesoamerica and the Caribbean (FIMCA, also known as Fondo Yucatán) to support regional infrastructure development. As part of the agreement, CDB will act as a financial intermediary for the Fund.
FIMCA will assist governments of CDB’s Borrowing Member Countries (BMCs) with reducing infrastructure deficits that remain a major impediment to economic growth. Resources of approximately USD70 million are available from the Fund, and accessible through various financial intermediaries, to Caribbean as well as to Central American countries.
“Substantial investment in upgrading and expanding the infrastructure is vital for job creation, and provides a solid pillar for sustained economic growth and poverty reduction in our Region. The Mexican infrastructure Fund will make a much-needed contribution to closing the huge infrastructure deficit that exists in CDB’s BMCs. It marks yet another milestone in Mexico’s ongoing commitment to assisting our Region to meet its development objectives,” said CDB President, Dr. Wm. Warren Smith.
“Mexico and the Caribbean are friends and allies in working towards the development and prosperity of our societies. FIMCA provides financial support for the development of infrastructure projects in Central America and the Caribbean, through financial intermediaries. CDB’s role in the Caribbean region is critical, therefore we are very pleased to have the collaboration of CDB as financial intermediary to the Fund, to continue working to support the development of relevant infrastructure projects that have economic and social benefits for the Caribbean countries and people,” said Vanessa Rubio, Mexico’s Deputy Secretary of Finance and Public Credit.
Deficiencies resulting from aging, non-climate resilient, inefficient, inadequate or missing infrastructure continue to adversely affect economic and social conditions in this Region. These deficiencies have been exacerbated by the 2008 global recession, as well as the increasing incidence and severity of natural hazards, brought about by climate change. Catastrophic losses suffered by Anguilla, Antigua and Barbuda, the British Virgin Islands, Dominica, Haiti and the Turks and Caicos Islands during the passage of Hurricanes Irma, Jose and Maria in September 2017 have further highlighted this issue and the need for urgent action to close the Region’s infrastructure gaps.
Bancomext is the trustee of the Fund, which provides financial assistance through intermediaries. These institutions support the beneficiary countries throughout the preparation, design and execution of projects, overseeing the adequate use of the Fund’s resources. Projects will be appraised by CDB, using its own rules and guidelines, and then submitted by the Bank to the Technical Committee of the Fund for consideration and final approval. As per the agreement signed by CDB and Bancomext, the Fund will provide grant resources of up to USD5 mn for eligible infrastructure projects in any of the Bank’s BMCs. Resources from FIMCA may be blended with CDB’s.
Mexico joined CDB in May 1982, and is a regional, non-borrowing member of the Bank. FIMCA was established in 2012.