June 28, 2001

MIF COMMITS UP TO $10 MILLION FOR LATIN AMERICAN FUND THAT ADVANCES ENERGY EFFICIENCY AND ENERGY SAVINGS

$25-50 million private equity fund will also encourage international investors

The Multilateral Investment Fund today announced the approval of up to $10 million in equity for the Latin American Energy Services Fund.

The fund will make equity or quasi-equity investments in small innovative companies that use energy-efficient measures or renewable energy for generating power.

As the anchor investor, MIF will commit up to $10 million to the fund, which aims at establishing a minimum of at least $25 million and up to $50 million in total capital. The fund, which will be managed by an affiliate of the FondElec Group, Inc., in Quito, Ecuador, will target potential investments in countries that have shown advances in energy efficiency and renewable energy technology projects, such as Mexico and Brazil.

MIF will have a key role in structuring the fund in accordance with its environmental and sustainable development objectives. Initially, the fund will pursue direct investments in energy-service companies that bundle together small- and medium-sized projects focused on improving the efficiency of production, distribution and consumption of electricity or thermal energy.

Subsequently, through performance contracts and other financial instruments, these energy-service companies will aim at assisting other enterprises to reduce their energy consumption.

"The need for this type of financial vehicle targeting the development of energy-service companies and improving energy efficiency is essential for the region, especially in light of the current energy crisis in Brazil," said MIF manager Don Terry.

The Multilateral Investment Fund, an autonomous fund administered by the Inter-American Development Bank, provides grants and investments to promote private sector growth, labor force training and small enterprise modernization in Latin America and the Caribbean.