It has an A- rating, and in 2019 (FONPLATA, 2020), it had about 1.3 billion US$ in assets, approved loans to a value of 460 million US$ and disbursed 221 million US$ on loans, in that year. It has been growing its portfolio over the past few years, since becoming a multi-lateral development bank, in an average of 30% annually. Its mission is to support the integration of the member countries in order to achieve a harmonious and inclusive development within and across the River Plate Basin’s areas of influence. It does so by financing small and medium-sized projects (typically up to 30-60 million US$) in specific geographic areas to help one or more countries achieve greater integration at a sub-regional, regional and global level. It therefore particularly focuses on projects in border areas and transboundary infrastructure. Role of FONPLATA in the water sector Within the water sector, FONPLATA seeks to operate under a river basin perspective. Water-related investments currently represent a relatively small percentage of the loan portfolio. This is explained by the fact that up to 2013, FONPLATA focused exclusively on regional infrastructure, particularly transport. Since then, the institution has been seeking to diversify and expand its portfolio to other sectors, including water. It has the ambition to grow its water portfolio, but is still developing a sector strategy to guide its work in water. Currently, it finances projects in two sub-sectors: •
Water supply and sanitation, including wastewater treatment. This is reported as a sub-sector in its own right. The annual report 2019 indicated that it represented 2% of FONPLATA’s entire loan portfolio.
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Water resources management, including urban drainage, flood protection and catchment protection. This is reported under the broader sector of environment, which represented 3% of 2019 FONPLATA’s loan portfolio.
Water sector products and services The following types of financial services, which are provided in general, by FONPLATA, are also provided in the water sector: •
Nationally-guaranteed credit to sub-national entities, such as municipalities, provinces and States for infrastructure development. In this, it works demand-based, whereby sub-national entities express a demand for financing. These demands are then prioritized by the national liaison agency and subsequently critically reviewed, with all due diligence and risk assessments. In some cases, project preparation may be included in the loan.
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Credit, without sovereign guarantee, to national development banks. These can then pass the credit on to their clients. These may or may not be used in the water sector.
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(Grant-funded) technical assistance. FONPLATA has a relatively small fund for technical assistance, which was established out of the profits of FONPLATA, with a turn-over of around 1 million US$/year. This is mainly oriented towards strategic studies, strengthening of intellectual, technical and institutional capacities and project preparation.
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Co-financing with other IFIs. Other, larger, IFIs, such as AFD, IDB, CAF and EIB tend to structure their projects and programmes by sector. But many sub-national governments need financing for multi- or cross-sectorial projects. FONPLATA is able to take on different parts of sectoral programmes of other IFIs, and bundle them as multi-/cross-sectorial projects.
Risk assessment Risk assessments are always project-based. An integrated analysis is made of technical, financial, economic, environmental and social aspects of the project. In addition, it includes an assessment of
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