About LACIF

WHAT IS LACIF?

The Latin America and Caribbean Investment Facility (LACIF) is one of the European Union’s regional blending facilities, and the result of the merge of the Latin American Investment Facilities (LAIF) and Caribbean Investment Facilities (CIF). Blending is part of the toolbox of the European Fund for Sustainable Development Plus (EFSD+) and contributes to the operationalization of the European Commission‘s Global Gateway strategy.

The purpose of LACIF is to leverage financing for key sectors essential for achieving the Sustainable Development Goals in Latin America and the Caribbean.

WHAT IS BLENDING?

The European Union blending facilities are instruments to catalyse financing for investment projects in beneficiary countries of the EU's external cooperation. They strategically use a limited amount of grants to mobilise financing from eligible financial institutions and the private sector in order to enhance the development impact of investment projects.

Through blending, EU grants are combined with non-grant resources such as loans, equity and guarantees from development finance institutions as well as commercial loans and investments with the aim of achieving a leveraged development impact.

WHAT ARE LACIF’S OBJECTIVES?

LACIF has three main interconnected and mutually reinforcing strategic objectives in line with the Global Gateway Investment Agenda:

Improving the quality and sustainability of infrastructure in Latin America and the Caribbean, including energy efficiency, renewable energy systems, sustainable transport and communication networks;
Increasing environmental protection and supporting climate change adaptation and mitigation;
Promoting equitable and sustainable socio-economic development through improving infrastructure for social services and support to SMEs.

Beyond the specific development objectives defined for each operation, the use of blending reflects the following specific goals:

financial leverage: mobilise public and private financial resources for enhanced development impact and do more with less;
stronger developmental impact: improve project quality, sustainability, innovation and accelerate the start of the project;
policy leverage: support reforms in line with EU and partner country policies;
aid effectiveness: improve coordination between European and non-European development cooperation partners (i.e. donors and financial institutions);
visibility: provide more visibility for EU development funding.

HOW DOES LACIF WORK?

LACIF 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 LACIF 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 LACIF at the headquarters.

Click here to download the Guidelines on EU blending operations

LACIF FINANCING MODALITIES

LACIF offers:

Technical assistance, tailor-made to meet specific project needs during both design and implementation phases. This helps ensure the quality, efficiency and long-term sustainability of the projects.
Investment grants that can finance specific components of a project or a proportion of the total project cost, thereby reducing the amount of partner country debt.
Financial instruments such as debt, equity and guarantees, which can mobilize additional funding from other parties.

These three financing modalities can be combined and are applied to reimbursable or non-reimbursable cooperation.