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Angela Marí­a Fonseca A.

PANAMA - Finance

Quite the Performance

Country Head & Principal Investment Officer, IFC Panama and Costa Rica


Angela Marí­a Fonseca A. is the head of IFC’s office in Panama. She moved to Panama three years ago from her country of origin, Colombia. She began her professional career in Bavaria, one of Latin America’s largest beer companies, later acquired by SAB Miller. In 1994, two years after joining Bavaria, she was appointed as head of the financial area until 1996, when she began work with a government agency to lead a new private infrastructure team. After two years with the government, she joined Citibank Colombia in 1998 as a relationship manager for public-sector clients. She joined IFC in Colombia in 2001 as an investment officer.

"There are a lot of positive conditions in Panama that attract foreign investment."

How do you assess Panama’s social and economic development in recent years?

Panama is one of the fastest growing economies in Latin America. Since the Panama Canal was transferred in 1999, the country has been an outstanding performer in terms of economic growth. This has allowed Panama to attract more FDI than perhaps any other country in the region, and has also required the government to invest in and promote more than 100 projects associated with the Canal, including the expansion of airports, roads, bridges, and many other infrastructure projects. These types of developments have helped integrate local companies into global supply chains and financial markets. Compared to other countries in the region, there is great public-private sector collaboration in Panama. The government has enabled an efficient and competitive landscape for the private sector, creating the conditions for companies to invest in Panama. Also, the rise of the middle class, which we have seen in many countries across the region, has been particularly strong in Panama and there has been an overall decline in inequality. In a recent analysis, our colleagues at the World Bank concluded that poverty has decreased over the last decade and, although there are challenges related to indigenous communities and minorities, this growth has been inclusive and can be attributed to all of these infrastructure projects, which created many job opportunities. Inclusive growth has been a major achievement.

What impact has the IFC had in Panama?

We have been present in Panama for many years and established a permanent office here in 2013, which is now IFC’s regional headquarters for our operations in Central America and the Caribbean. IFC has participated in most of the landmark transactions in the country. We supported the expansion of the Panama Canal. Before that, we were present in the privatization of the port sector; we were investors in the Manzanillo International Terminal in Colón. We provided a $300 million financing package for the UEP Penonomé wind power plant, the largest wind project in Central America and the first of its kind in Panama. We are proud of the partnerships we have made over the years in Panama and our clients’ ability to have a positive impact on the country’s development. Our clients in Panama generate about 3,000 jobs.

Why was Panama chosen as the location for your regional headquarters?

There are a lot of positive conditions in Panama that attract foreign investment and multinational institutions like the IFC. Many people want to come here because Panamanians are open to foreigners. The connectivity from Tocumen Airport to the rest of the region is the primary advantage of Panama for us. The country is also home to excellent schools and high quality services, so it is attractive for foreign investors and foreign companies to establish offices here. There is a solid financial sector. The UN is also present in Ciudad del Saber.

What sectors comprise your portfolio in Panama?

Our portfolio in Panama as of November 2015 amounted to $942 million, and that includes $200 million of mobilized funds from partnering banks and other multilateral institutions. The main sectors within this portfolio are infrastructure, with $600 million, and banking, with $290 million as of the end of November 2015—this includes both loans and equity. The main investments in infrastructure are the Panama Canal and the Penonome wind farm. In the banking sector most of our investments are aimed at improving access to finance or supporting the lower to middle-income mortgage market, which is underdeveloped. Other investments are telecoms and education projects. We are on track to grow our portfolio to $1 billion by the end of 2016.

Why did the IFC decide to get involved in the UEP Penonomé II project?

About 30% of Panama’s electricity generation is based on fossil fuels. As Panama’s energy needs continue to rise, it must also increase its investments in power generation, particularly in ways that ease the dependence on imported fossil fuels and contribute to a reduction in carbon emissions. That is why we invested in Penonome; to help the country improve its generation matrix and increase renewable generation sources. This 215-MW project is going to produce about 5% of the country’s energy generation. We have funded $300 million, including mobilized funds from other banks and investors. We will also continue to support electricity generation projects coming into the energy matrix. We want to be present in all landmark transactions in the country. Through our sister organization, the Multilateral Investment Guarantee Agency or MIGA, we were involved in the Metro Line 1 project. We are looking at the expansion of new ports and are tracking the development of new initiatives in the logistics sector. The banking sector is also one of IFC’s core areas of investment. IFC’s recent transaction with Banco General is aimed at increasing the availability of mortgages for low- and middle-income individuals, which is where the largest mortgage gap is. Addressing the mortgage sector is important because it has a lot of indirect positive impacts, like stimulating the construction sector, building materials, manufacturing, and job creation. Panama builds 11,000 homes per year, but the need is 12,000-15,000. This deficit occurs primarily in the middle- and lower-income segments, and that is why it is important to revitalize the mortgage lending industry.

How can Panama ensure that wealth creation continues to be inclusive?

This government is well positioned to increase social investment. That is the reason why they have several interesting programs to increase water supply, electricity supply, and a lot of social and indigenous programs aimed at decreasing poverty in the most vulnerable areas. Our projects will contribute to decreasing poverty in the most vulnerable places in Panama, and our colleagues from the World Bank are focused on participating and advising the government with lending operations to alleviate poverty, especially by increasing access to clean water, as this is one of the main challenges in the poorer communities. The other challenge for Panama and its future growth is the quality of education in regards to the skills gaps. We recently financed the construction of a new Universidad Interamericana campus to provide better facilities and higher-quality education to students from middle- and low-income backgrounds, as well as working adults. We are exploring new opportunities to support the government and the private sector in order to improve the quality and availability of education. One of the areas where there is a skills gap is in Canal-related logistics, so universities are creating specific programs to address that. Education, water, and sanitation are important for Panama, and we would like to be present in them all.



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