CIFI was created as an initiative of Caja Madrid, the second largest Spanish savings bank, and the Interamerican Investment Corporation (IIC). Caja Madrid and IIC, with 18.5% each, are the largest shareholders of CIFI, with the remaining shareholders, primarily commercial banks, owning 10% or less of the share capital of the company.

The proposed IFC investment consists of: - a loan of up to $20 million for IFC’s own account; - a B loan of up to $50 million; and - an equity investment of up to $10 million. IFC’s equity participation would involve the purchase of shares from certain existing shareholders, intended at consolidating the currently dispersed shareholding structure. In addition, IFC will assist the company in raising parallel financing of up to $70 million.

30.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	20.0
Equity	10.0

* These investment figures are indicative

CIFI is incorporated in Costa Rica and provides financing for infrastructure projects in LAC. Its operations are conducted from Arlington, Virginia.

IFC's support to CIFI through the provision of longer term funding and an equity investment will generate high development impact by: - Reducing the infrastructure investment gap in Latin America: Infrastructure investment has high development impact through facilitating economic development. CIFI targets an under-served niche and its operations will be incremental to those being carried out by other regional players. - Increasing access to basic services: CIFI's portfolio covers a wide range of projects including water supply, transportation, power and social infrastructure. Going forward, CIFI is expected to support infrastructure projects that similarly convey high developmental impact for local populations. - Demonstration Effect: Given the high developmental impact of infrastructure investment, IFC intends to foster similar business models in other emerging market regions going forward. CIFI could provide a benchmark for similar models in other regions of the world. - Increasing employment: Infrastructure investment facilitates local economic activities, hence fostering the creation of related jobs and services; e.g. jobs and services for construction by equipment and construction material suppliers; and jobs created by other businesses linked to and/or located near the project sites. - Higher fiscal transfers to regional governments: The infrastructure projects supported by CIFI are expected to be economically viable / sustainable and result in net positive tax payments to local and national governments.

Through the provision of financing to CIFI, IFC will establish a partnership with an important player in infrastructure financing in Latin America that can provide incremental long-term financing required for infrastructure projects in the region. IFC is expected to contribute to the implementation of CIFI’s business plan through the transfer of industry knowledge, structuring skills and best international practices. CIFI would benefit from IFC’s exposure to international industry practice and innovative financing solutions across emerging market regions. IFC’s investment and its mobilization efforts through its global participant bank network will also introduce CIFI to new term lending institutions, which will likely continue their business relationship with CIFI in the future. In this regard, IFC will provide the company support through direct financing and mobilization efforts, which are key steps towards the company’s stated goal of achieving an international rating and the flexibility to raise lower cost long term funding from the capital markets. In this context, through the proposed investment in the company, IFC would also provide comfort to other potential institutional investors in the company.

This is a Category FI project according to IFC''s Environmental and Social Review Procedure. CIFI has an existing Social and Environmental Management System (SEMS), which IFC analyzed at appraisal, along with CIFI''s plans for future activities. CIFI''s SEMS is generally comprehensive and satisfactory, with a few areas needing revision to comply with IFC requirements. CIFI will be required to revise its SEMS to IFC''s satisfaction prior to disbursement; implement the revised SEMS to ensure that investments supported by IFC financing comply with applicable IFC Performance Standards, national social and environmental standards, and IFC''s FI Exclusion List; and submit Annual Environmental Performance Reports to IFC in a form agreed with IFC.