Regional Investment Fund
- Beneficiary country(s): Regional
- Sector: Finance
- Year: 2020
- Beneficiary Executing Agency:
Financial Division at CABEI
Over the last two decades, Central American economies have seen a significant increase in the inflow of foreign direct investments. However, much of the capital has been concentrated in only a few countries. There are at least three main obstacles that prevent the much-needed international investment across the region´s financial markets:
- Lack of information about its markets, their functioning, features, regulators and diverse operators.
- Local market institutions need to be strengthened in order to align them with international standards.
- Lack of understanding and trust in the region's financial system and markets.
These barriers generate high risk premiums that must be overcome to mobilize capital into the region. The Regional Investment Fund would seek to compensate investors for the required risk premium.
Address the lack of regional investment vehicles for the Central American region through the establishment of a company that will register and list in the Panamanian capital markets. Such fund will invest in locally issued sovereign and corporate debt denominated in US Dollars
Position CABEI as a financial agent in Central America to attract and channel resources from institutional investors. The Bank can create different financial structures for the purpose of facilitating investment in projects and/or assets located in CABEI member countries. This will foster not only regional financial integration, but more balanced economic and social development of the countries of Central America.