InterviewChief of Development Bank of Latin America sees Korea as key regional partner

Development Bank of Latin America and the Caribbean (CAF) President Sergio Díaz-Granados / Courtesy of CAF

Cooperation between Korea and the Development Bank of Latin America and the Caribbean (CAF) has reached a “very solid stage” after nearly two decades of engagement, CAF President Sergio Díaz-Granados said, citing growing opportunities in infrastructure development, climate resilience and digital transformation across the region.

In a written interview with The Korea Times, Díaz-Granados said the partnership, which began in 2006 with CAF’s first operation alongside the Export-Import Bank of Korea (Eximbank), has evolved steadily into a strategic relationship that goes well beyond traditional lending.

“What began as a financing relationship has progressively developed into a broader partnership that combines financial instruments, technical cooperation, knowledge exchange and policy dialogue,” he said, adding that the cooperation now reflects nearly 20 years of sustained institutional engagement.

Established in 1970, CAF is a multilateral development bank whose core mission is to promote sustainable development and regional integration across Latin America and the Caribbean. The bank finances projects in both the public and private sectors, provides technical cooperation and offers specialized financial services to its member countries. CAF aims to improve quality of life in the region by supporting infrastructure, social development, climate action, education and economic growth initiatives. It currently has 24 member countries across Latin America and the Caribbean.

Díaz-Granados said the partnership with Korea has expanded significantly in recent years, particularly through institutional learning platforms such as Korea’s Knowledge Sharing Program, which has supported applied policy projects in areas including urban mobility, vocational education and forestry, and more recently circular economy and waste management.

A major recent milestone was the renewal of a $200 million interbank credit facility with Eximbank, alongside the signing of a dedicated co-financing agreement that enables joint and parallel financing structures for development projects throughout Latin America and the Caribbean.

“These instruments strengthen CAF’s capacity to mobilize resources and attract investment, particularly in priority sectors such as sustainable infrastructure, energy transition and green growth,” he said.

Díaz-Granados described Korea as a uniquely valuable partner at this stage of the region’s development, citing its advanced technology base, long-term financing capacity and experience in development transformation.

Hombre Muerto salt flat in Argentina's Salta province, located at an altitude of about 4,000 meters, is where POSCO produces lithium from brine. Courtesy of POSCO Group

“Korea’s own trajectory — from a recipient of development assistance to a global leader in innovation, industrial policy and infrastructure — offers highly relevant lessons for countries seeking to boost productivity, resilience and inclusive growth,” he said.

He added that Korea also plays an important role as a long-term financing partner through institutions such as Eximbank, combining capital, technology and knowledge cooperation to support Latin America and the Caribbean’s priorities in regional integration, sustainable growth and inclusive development.

Looking ahead, Díaz-Granados said the greatest potential for expanded cooperation lies where CAF’s regional mandate converges with Korea’s comparative advantages. These areas include sustainable infrastructure such as transport, logistics and urban systems with integrated technology; climate resilience and the energy transition through renewable energy, smart grids, energy storage and hydrogen; digital transformation in e-government, smart cities and digital public services; and industrial development focused on advanced manufacturing, electric vehicle ecosystems and digital small and medium-sized enterprises.

CAF and Eximbank have already taken steps to improve alignment between Korean development finance and CAF-backed projects, he said, through closer cooperation on early project identification and preliminary reviews across Latin America and the Caribbean.

“This early dialogue allows both sides to better understand project pipelines, eligibility criteria and financing options from the outset,” he said, noting that projects in energy transition, urban transport, health, education and sustainable infrastructure have already been shared for assessment.

Latin America and the Caribbean continue to face significant infrastructure gaps, particularly in transport, logistics, urban services and digital connectivity. Closing these gaps, Díaz-Granados said, will require not only higher investment levels but also stronger project preparation, long-term financing and closer coordination between public and private actors.

Within this context, regional integration through transport and logistics infrastructure represents one of the strongest opportunities for Korean companies in CAF-financed projects, he said. CAF’s regional integration agenda prioritizes investments in border development, logistics corridors and trade facilitation, including key subregional corridors linking the Atlantic and Pacific coasts.

“These investments are critical to improving competitiveness and preparing the region for greater participation in global value chains,” he said, adding that the priorities align closely with Korea’s experience in large-scale infrastructure delivery, logistics systems and digital integration.

Climate resilience and the energy transition are also central to CAF’s development agenda. While Latin America has made progress in renewable energy — particularly solar, wind and hydropower — Díaz-Granados said major challenges remain in modernizing aging transmission and distribution networks to integrate a higher share of renewables.

“Investments in grid expansion, digitalization, energy storage and advanced transmission technologies are essential, and Korea’s expertise in these areas is highly relevant,” he said. He also highlighted opportunities for cooperation in decarbonizing transport through electric mobility, charging infrastructure, biofuels and other low-carbon solutions.

Díaz-Granados said CAF can also serve as a bridge between Korea’s strong startup ecosystem and development opportunities in Latin America, by linking startups to public-sector projects, supporting regulatory sandboxes and pilot programs, and facilitating partnerships with local institutions.

Looking to the next five to 10 years, he said elevating CAF's cooperation with Korea will require scaling existing financial frameworks, expanding knowledge exchange and policy dialogue, and creating clearer pathways for Korean private-sector participation in CAF-financed projects, while maintaining CAF’s development mandate.

He urged Korean policymakers and business leaders to view Latin America and the Caribbean as long-term partners in building sustainable, digital and resilient economies, adding that CAF offers a platform to scale Korean technology, finance and innovation across the region.

Díaz-Granados also invited Korean stakeholders to participate in CAF’s annual CAF Economic Forum for Latin America and the Caribbean, to be held Jan. 28 and 29 in Panama City, which will bring together governments, the private sector and international partners to explore concrete opportunities for cooperation in sustainable development, innovation and infrastructure.