ASUNCIÓN – The Development Finance Agency (AFD) of Paraguay has announced its plan to concentrate investments on green finance and road construction projects moving forward, coinciding with its 20th anniversary. AFD President Stella Guillén reflected on the past two decades of contributing to the solution of structural problems in the financial market and presented key future challenges: expanding financial support for sustainable development and effectively advancing Public-Private Partnership (PPP) projects.
Over the past 20 years, the AFD has played a key role in Paraguay's economic growth, disbursing loans totaling $5.18 billion, supporting 187,000 companies, and creating over a million jobs. This is seen as a successful fulfillment of the AFD’s founding purpose, which was to address the financial market's limitations, such as high interest rates and a lack of long-term loans. President Guillén emphasized, "Twenty years ago, it was difficult to secure financing for investments. The AFD tackled market failures by providing financial institutions with long-term resources and low interest rates to stimulate investment."
The AFD's main strategy for the next 20 years can be summarized into three key points. First, it will actively pursue green and sustainable finance. In response to the growing importance of climate change and environmental protection, the AFD plans to expand its investments in eco-friendly projects to drive the nation's sustainable growth. Second, it will strengthen financing for Public-Private Partnership (PPP) projects. With increasing government fiscal constraints, the goal is to accelerate the construction of essential infrastructure like roads and social amenities by leveraging private capital. Finally, it will focus on enhancing its project planning and structuring capabilities. President Guillén noted, "The lack of bankable projects has always been a major challenge," and stated that the AFD will proactively participate in the project discovery and design phases to increase execution effectiveness.
Additionally, the AFD will continue to explore support measures for micro, small, and medium-sized enterprises (MiPYMEs), which form the backbone of the Paraguayan economy. Under the belief that the growth of these businesses leads to national economic development, the agency will work on developing new financial products and expanding funding channels for them.
This announcement is seen as an important signal of Paraguay's future economic development direction. With a public financial institution like the AFD taking a leading role in tackling the two core challenges of a green transition and infrastructure expansion, the policy foundation for Paraguay's sustainable future is expected to become even stronger. All eyes are on how the AFD will now specify and execute the goals it has outlined.
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