Bret Kugelmass
So we are here today on the Energy Impact Podcast with Angel Eduardo Cardenas Sosa, who is the Director of Infrastructure Projects at CAF, The Development Bank of Latin America. Angel, thank you and welcome to the show.

Angel Eduardo Cardenas Sosa
Thank you. And again, it's an honor to be here with you.

Bret Kugelmass
We'd love to learn about development finance in Latin America from the expert himself. But before we do, we'd actually love to learn a little bit about you. Who you are, what your background is, what made you the man you are today?

Angel Eduardo Cardenas Sosa
Oh, well, that's a I don't know if it's a fun question or a fun answer. But anyway, in a nutshell, I've been passionate about development since I remember. I think I always wanted to go to school in economics and work in economic development, which I did. And then I was fortunate enough to start working at multilateral development banks, first in Washington DC at the World Bank Group, and then I transitioned into a Regional Development Bank, which is called CAF, Latin American Development Bank. And I've been here for almost 15 years already, and started off as an economist and then I got into more the business side and with infrastructure. So then I’ve been in energy, transportation, telecom, and all types of infrastructure and basically financing governments and the private sector.

Bret Kugelmass
And where did this initial interest in economics come from though? When you were younger, and you're picking what to study, how did you settle on numbers and math and finance and economics?

Angel Eduardo Cardenas Sosa
Well, few things. I mean, I think when you're born in a country, although Venezuela at the time it was a middle income country, but you could see the inequality, you could be in a good neighborhood and didn't see far up in the hills you would see precarious habitats or houses. And you would see the inequality I think that definitely shocked me. And then I think when I was very little, there was political turmoil in my country. And it was basically, as a consequence, at the moment of protest against ironically some multilateral development bank programs. And this was back in the 90s. And it was just my passion, you know, it just became my passion. I wanted to do good. I wanted to give back. I wanted to make something out of the great opportunities I had and I've been fortunate to have in my family. And it all worked out. I mean, I think, you know, I first experienced the U.S., which opened doors for learning language when I was in high school as an exchange student. So I lived in Minneapolis. So that opened up a lot of doors because then I could get a sort of a sense of how to speak the language which was 30, or less than 30 years ago, it was a big deal to learn a different language and to be fluent. And then I got a scholarship in the States, I started there and started working at the bank, got the opportunity to move back home with the bank, transitioning to this. And ever since I've remembered or I can recall, I've been passionate about development economics, I've been tempted a couple of times with the private sector, I did some sort of secondment in an impact investment fund, I even got job interviews with investment banks in New York, but to be honest, to me it's development. So I’m 100% committed to this.

Bret Kugelmass
So tell us, what is a development bank? And you've mentioned the idea of a multilateral development bank, most people probably only know of banks, like, I put my money in a bank, and you know, they hold on to my money, and I get it out later. What makes the development bank unique and special? And what role does it play in the broader economy?

Angel Eduardo Cardenas Sosa
Well, you'd be surprised how many times I get a phone call and, you know, so what can I deposit anyway? $500? And, you know, you have to be kind and polite, but also tell them well, you know, we kind of work in huge ticket deals. And, you know, it's kind of fun to have friends that come up to you at the beginning it was like, so are there any good loans for cars? I'm like, no, it doesn't work like that. So basically, development banks have important roles. It tries to work where there are market failures. In the case of energy, it's a good example, how sometimes the financing structures are not commercially viable at the moment. But there are banks that have a clear development mandate to support the country's national development agenda and want to incentivize this investment. So at some point, they're scalable. So for instance renewable energy, let's jump into that. In Argentina a few years back with RenovAr, which was the Renewable Energy Program, the government needed to de-risk the structures in terms of making it commercially viable, and more importantly, appealing to investors. But you needed to have banks that would be able to provide a longer duration of 10 years and some affordable interest rates to make these first transactions viable and to make a leading case, and then to scale that. So development banks come in there with a very bank oriented perspective, but understanding that, I mean, if we can solve or help to solve the market failure, we'll be doing our job. And we team up with private banks that actually are more likely to work with us because they understand not only that we have a strong balance sheet, but that we are owned by the government, which is what is interesting about the governance. Development banks are owned by the governments. In our case, there are 19 countries in Latin America that are owners, although there is quite an independent administration that runs things. But private investors see that as an advantage because that could derisk any potential political issue that could arise or exchange rate freezing or issues or all sorts of things that you know that if you’re pairing up with a development bank could happen. So that's one part of that development banks do. But also, we work a lot in sectoral strategies in terms of generating and promoting applied knowledge in terms of policy making. Hopefully gathering the lessons learned and best experience that can be applied into the public management of our countries. But also to work with the private sector players, for instance, entrepreneurs, innovation, innovators, technology, in emerging markets or Latin American markets, that is the one that I'm working with. You could learn from the experiences in different countries, and more importantly, how can you help them to beat the market failure and hopefully make it scalable. And so we do that and we also work directly with the investment programs of the countries and that's something I've been working with in the last couple of years how different ministries or secretaries of infrastructure and public works require X amount of money to develop impactful projects. And we provide financing in terms that are appealing and are more manageable for governments. And I mean, we range from projects from large highways to sustainable transportation, like huge metros in Sao Paulo or Quito, or Panama. So that's what we do. So we're a mix between the private sector because we are a bank, but also as an international organization we definitely have connections with our governmental side because at the end we're owned by governments.

Bret Kugelmass
And so just to make sure I understand, there is a company just like, I might want to get a loan to start a small business, there are companies out there that want to do big project development that need, you know, tens of millions or hundreds of millions of dollars as a loan, in order to help facilitate, you know, the growth of their business. But there is a misalignment sometimes between what the market will support. Maybe a project is a little bit more risky or a little bit more costly. But the project has some other natural benefit to it, maybe it creates jobs, or maybe brings clean energy to a country. So the government's want to kind of like, tip the scale a little bit to better align their overall mission with the direct economic implications of that, you know, one specific deal. Is that about right?

Angel Eduardo Cardenas Sosa
It's about right, and you touch upon a point that is very important. We also are involved in transactions that generate impact, economic impact. And as you mentioned, I mean, it's hopeful that it would be environmentally sustainable, and that it creates wealth for society overall, in general. So our projects, and that's how we assess or evaluate our projects have to meet certain criteria. And because I mean, what,

Bret Kugelmass
What does the term multilateral mean, as opposed to just a development bank?

Angel Eduardo Cardenas Sosa
Do you know what I think it's more of a historic concept. I think it all started out with Bretton Woods after the Second World and with the IMF and the World Bank. And I think it was the concept of living in a multilateral global world where like, I mean, there were necessarily different players that that were relevant or stakeholders in this international financial architecture discussion. And I think that evolved into a development bank and then more. If you take, for instance, the International Monetary Fund, the IMF is a multilateral bank because it has different players who are from different countries. But it specializes in macroeconomic financing, whereas the World Bank, which is its sister organization, specializes in financing development projects, projects that will generate development economic or economic development. So I think that's the difference. But I think I mean, you could interchange that. And to be honest, I don't know, I will probably go for the development bank more than the multilateral. But actually, that's a business line that has been growing a lot in investment banking, DFIs, development finance institutions, or development finance business units, because I mean, with all the ESG I mean, investment firms understand that they have to chip in also in this market segment,

Bret Kugelmass
And how do the different countries all get along? And how do they express their different priorities? Because I imagine if there's some amount of subsidy involved, you know, in order to make the deal happen, are different players coming in at different rates? And how does that affect the prioritization of where the projects actually go? What's the story there?

Angel Eduardo Cardenas Sosa
Well, that's a very interesting question. All development banks, in general, are pretty independent in terms of their funding business model. I mean, they tend to have very competitive rates or interest rates. They do their fundraising at a very competitive rate. That could probably be better than even the country members. So that happens. And so what happens is basically it has the business model of a bank as a capitalization structure. And that capitalization structure allows you to have an X amount of envelope, an envelope of, let's say, Mexico's got up to $800 million in financing, and what you do in terms of, sometimes you split it between when it's going to be placed on the public sector financing window, and then some other in the private sector financing window. And you'd negotiate in the context of what makes more sense in terms of economic development when it's aligned with the National Development Strategy. And more importantly, while also aligned with what we consider is the right, not the right development strategy, when we can see there is a suitable development strategy in the region. So let's say we tend to focus on the infrastructure sector, a lot of energy, transportation, sustainable transportation, and roads, just to say, a lot of things like internet connection and Telecom, because we understand.

Bret Kugelmass
And what I'm hearing with all of these things is, and tell me if I'm wrong, but these things are enablers of prosperity. And these things are like the foundation that is required for the rest of the economy to grow. It's like you establish telecommunication, you establish transportation, you establish energy infrastructure, all of a sudden now it's easier for the local people within these countries to create their own businesses. And for bigger businesses to form is that part of the theme of how you guys select projects?

Angel Eduardo Cardenas Sosa
Because you would frame it in terms of what I mean, what develops or what creates economic impact or economic development impact. And again, it's all about productivity increase and competitiveness. And when we use the example of infrastructures these are drivers that would actually propel or spur economic growth and would enable many stakeholders to do better and to get more chances. Yes, you're correct.

Bret Kugelmass
So what are some of the big projects that your bank has helped pioneer or been responsible for allowing to move forward? Are there classic examples that you guys like to reference?

Angel Eduardo Cardenas Sosa
I think, I mean, as we started off, we've been 50 years already. I mean, we turned 50 this year. And I think we worked a lot, and we finance a lot of integration projects, under the premise that I mean, if you want to promote economic growth in a region, this really needs to be integrated, and hopefully do some inter-region trade. But when you see the countries I mean, they did not have the connectivity capabilities in terms of connecting, transporting goods or people.

Bret Kugelmass
So we have roads and highways and maybe even railroads between countries.

Angel Eduardo Cardenas Sosa
Exactly, exactly. And with that in mind, I mean let's take Bolivia, for example, that is one of the countries I see in my portfolio. We've financed more than 5000 kilometers in terms of roads, and roads that would connect isolated populations to different markets, and more importantly, generate and spur economic growth. Because I mean, if this is behind it, if you connect markets, if you connect people there would be exchange, and also that would lead to more economic growth. But then we also have a lot of projects in terms of transmission, energy transmission, again, to hopefully support governments and countries in terms of providing secure service and hopefully bring more productivity to people.

Bret Kugelmass
Right, because that's a classic example of like a rising tide floats all boats. I mean, you might have one country that has like abundant hydro resources, they might actually have more energy in that local region than they can even handle and then they've got a neighboring country that's physically very close to them and could use some of that cheap energy to help grow their economy. But if you can't make that connection across the two countries, then you can't take advantage of that resource. Is that an example?

Angel Eduardo Cardenas Sosa
That's a good example. And you would have countries that would actually waste their energy and otherwise they would have connected and transmitted to neighboring countries where the energy was needed. But the proper infrastructure wasn't in place. So you would have to develop those types of infrastructure more recently, and we've worked a lot more of the social side of the infrastructure combined meaning that it's required, like the hardware infrastructure, which is the proper infrastructure to enable, but along with content and more software, and hardware in terms of like, connectivity to schools, for instance, and last-mile connectivity to people and, you know, hopefully, to help populations transition into the fourth revolution, industrial revolution standards, in terms of achieving more established capabilities, and you know, providing that bridge so they could update and hopefully, engage successfully in the fourth industrial revolution.

Bret Kugelmass
And what, what types of projects do you guys have going on right now? And what are the various stages that you guys have clear like earmarked, like, we're evaluating stage, we are actively financing stage, we're recouping our money stage, what are the various stages?

Angel Eduardo Cardenas Sosa
I've seen it all happen at the same time, and it's more based on a project cycle. So we take a project cycle, a transaction cycle, and to understand in terms of banking, I mean, you would apply to development banking, what you would apply in any other transaction. So they could be happening, either originating or recovering at the same time. But in my case, I would say I'm working a lot on sustainable transportation these days. And working, we've been working a lot in renewable energies. And we've been working a lot in connectivity and telecommunications. I mean, recently, we've financed satellite programs for one country in a region that has the capability to design and launch satellites and prove, solve their digital divide and gap. And also, we've worked a lot in the education sector in terms of connectivity to educational centers, and population, and telemedicine.

Bret Kugelmass
So how does a deal happen? Does the private developer have to find you? Do you guys find the developers? Is there a matchmaking service somewhere? How does the deal come together?

Angel Eduardo Cardenas Sosa
You have a couple of windows. So and I mean, I would start off like with the public sector window. So basically, their demand in countries is always superior to what is offered so we have a limited number of resources. And so governments could establish their priorities. And we go to what we call the programming mission, which is not, which is basically how we sit together. But we've been working a lot with the country office first in developing a strategy and hopefully prioritizing out of what they're thinking is good for them in terms of investment, well would actually match our strategy. And where we could add value, because we also need to understand I mean, our financing works if we can maximize our value addition, if not, doesn't make any sense. I mean, they could have differences. So once you have these prior prioritized pipelines, you have more of a formal process when you talk to the government authorities. And this sometimes is on an annual basis. And you agree on a formal pipeline. And of course, you just mean basically to channel the resources to develop any technical assistance that is needed to actually come to a mature project and then evaluate it, approve it, sign it, formalize it, and then disperse it. So that happens in the public sector when we're talking to the private sector, we also do it more like a bank. Basically I mean, there are two primary developers of renewable energy, let's take one. I mean, they are private developers that want to build a 100-megawatt solar plant in Chile. And the basic, I mean, started the whole reaching out to us and our routine, what we call the originating process, the loan origination process. And we see first with a teaser, and we understand what the economics of the products are from the technical side, from the environmental side. And if that checks then we also see the terms of the character as well, we proceed to hopefully write an engagement letter and we start our due diligence. And if this requires syndication, we'll reach out to our global partners in terms of funding or syndication and we develop and structure and then finish our tutorial. We go to a credit committee, a private, and then we negotiate the contract and we start dispersing them, we start and we continue following the project. So it's very, it's pretty much standard. And we also do less comparatively to our loan portfolio, but we also do equity. So I mean, we've partnered up with funds and we've been doing a lot of FinTech and innovation and energy. And we also do that, again, a proposal comes or interest in terms of a potential private equity investment, and we do all the due diligence. And if it checks, we go ahead.

Bret Kugelmass
So is that unusual for banks? In the US, I feel like if a bank does loans, maybe you can't do equity. I might be wrong on that. But is that like a unique capability of your bank to be able to do both loans and equity?

Angel Eduardo Cardenas Sosa
So we definitely have independence. But we have our different business units. So you would find that, again, development banks could do that because they would have the private and public sector window. The thing is that if you're in the sector, and you're interested in infrastructure across the board you could probably add value in all this process, perhaps in the origination process and restructuring, but of course, you would have units that are specialized in products, in terms of like, I mean, do you need somebody come into the do the product appraisal says, you know what, this checks, continue. In the evaluation and the approval, approval, and disbursement stages.

Bret Kugelmass
And how do you guys do product appraisals? Are we talking about evaluating, like the technology itself? Or is it an evaluation of many characteristics of a project, including, like the management team and other aspects like that?

Angel Eduardo Cardenas Sosa
It's a very broad view. So it is a very broad view. And we take into account many dimensions, I mean, we have a responsibility with our shareholders. So we maximize that where we pool our money, our financing, it's more capable people. So management is definitely for sure. And the financial part, economics is definitely key. But we also have sectoral or specialist, technical specialists are a part of our teams, that could give us an independent overview or assessment, either technology, either day construction, whatever the final financing destination is, they could provide an independent assessment that sometimes when it's the private sector, I mean, we compare to the independent review that normally these firms have or these investments have. So that's it.

Bret Kugelmass
And then how do you guys handle the technology side? Because I imagine, you know, evaluating the technology of a 100-megawatt solar plant, while it's a big solar plant, is still very different than evaluating the technology of a company that shoots satellites in this space. So how do you think about such a broad technology, you know, a palette that you guys have to extend the cross?

Angel Eduardo Cardenas Sosa
Locally, we have different teams with different expertise.

Bret Kugelmass
And this is internal, you have internal people of all different expertise.

Angel Eduardo Cardenas Sosa
We have a lot of internal capacity, it's required. And we also could get consultants, I mean, they have to go through a very competitive process and very strict checks in terms of like, proficiency, technical proficiency, that could be part of our teams, during that. We did and it is something that I would actually interest you, like 12 years ago, we did the refurbishing of a nuclear plant. So I happened to go, I went like 10 or 15 times. No, I went like 15 times to this plant. And every time I went, it was literally Ph. D class, of course, because I had these amazing consultants that were working for me. But at the end, it's like these guys are the brightest of the brightest and so we've had discussions in terms of technology and so they could digest a lot of the technical parts that were needed for us to not to approve the transaction but to monitor the ongoing process or the disbursement process and the construction part or refurbishment part of this plant. So that's an example. And the same happens with satellites. I mean, it's, I think one of the takeaways of my career here is I have seen a lot of different sectors. And it has been very interesting. So I don't remember a boring day in a project, there's always something new. And that's awesome.

Bret Kugelmass
You know, I wish that a lot of young people could hear what you're saying right now because I bet that a lot of people, I know I did when I was younger, think, oh, bankers, that's probably a boring job. But what you're telling me is you get to travel around the world, looking at the newest, and you know, and really meaningful technology, and then meet with some of the smartest people in that sector, and, and have to learn a whole new space, you know, over and over and over again, which sounds a lot more exciting than like, quote-unquote, being a banker.

Angel Eduardo Cardenas Sosa
I always joke around with my friends that there are two types of bankers and this is, this is a bad joke going to say it anyway, the good the bad ones and the good one's the development banker. So yeah, because I mean, there is a prejudice that, you know, bankers are boring or bad. Now, I think we again, I mean, a sector that we could to get, we could be sophisticated in terms of like using state of the art products and financing, but we also have very close exposure to, to policymaking to public policymaking, which is my other interest, and that's where the connection is, between the financial side and the economic development. I mean, because we are exposed to public policy.

Bret Kugelmass
So tell me more about that. Because it seems to me that with so many countries, under the umbrella of your bank, that it's not just one policy. It's like a lot of policies that you have to understand and be informed of and keep aware of. So what are some of the challenges associated with that?

Angel Eduardo Cardenas Sosa
Well, I think you have a container or a range, very broad of different policies, I mean, you would have some policies that would be more open in terms of economic performance, and some that would be more closed. And, but if they were to develop throughout time, it's understanding it's going beyond prejudice, and understanding, or debias and understanding that whatever they're proposing, if it makes sense, in terms of economic development, you should back it up and support it, and develop an alternative that would make it your financing functional and useful to them. So but yes, I mean, you do develop throughout time quite an expertise to understand regulatory frameworks and policymaking processes and understanding. Clear stakeholder map in many countries that, you're shocked sometimes, you know, it's like, huh? How do I know this? If I haven’t been there I don't know, in six months or a year maybe. And you connected that. So yeah. And that makes it interesting. So again, with the whole banking thing that makes it interesting.

Bret Kugelmass
Can you tell me maybe a story of a specific project, you know, as long as nothing's, you know, confidential, but tell me a story of a particular project that, that did have some challenges to it, and that you had to, you know, meet with a bunch of people and coordinate and learn things and really had to, and it was, it was a tough one to actually get through? Do you have any that come to mind?

Angel Eduardo Cardenas Sosa
Oh, my God, I probably have 20. So I was a few years back, it was a transportation project in a city. And so basically, I mean, you always have to deal with the political pressure in terms of, you know, politicians or decision-makers in government things in political cycles. And that something thinking in life, you have to understand if you want to be in any type of business, but anyway, in this one, it's, it's probably more important, so that thinking and political cycles, and this doesn't even necessarily match the project type. Because I mean, there was a lot of institutional capacity building that we needed to create. There was a lot of time in terms of studies that needed to be feasibility studies that needed to be finished, in order to evaluate and assess. But then again, you have the political pressure, and you have to be able to manage that to balance that without offending the other side or getting into a fight or an argument, but being very strict and, and strong in your arguments and also understanding that your client would also be your partner down the road. So we had this project and the pressure was tremendous. And these are hard types of situations when you have to be very smart if you want to escalate or not. Because if you escalate ideas, well, you can make a mistake, and you could lose the credibility and the confidence of your counterpart forever. So it took a lot of sitting down from seven o'clock in the morning until 10 pm in the city, a lot of calls, a lot of defining and a strategy. And sort of like creating notches that, you know, could help them incentivize to make decisions in terms of reasonable decisions. But also understanding I think is key, what their thinking was if you come in being arrogant and thinking you have all the answers, and you could prescribe your measures, and they would do it right away. I mean, you have to put yourself in their shoes, you have to understand what their motivations are. So we did that a lot. I had an amazing team that backed me up for that. I'm very proud of my team in that transaction. I'm very proud of my team but that was, that was pretty amazing, we spent quite a bit of time going around talking to the manager, talking to the President, the City Council, bringing in evidence, I mean, I've to think also, this is something that people assume that if you're a politician, they're not capable to understanding data, or information. But the problem is not the data and information you had how you build a narrative, how you express it, how you come across, if you come across from a very technical perspective, even snap perspective, you may not get your point across, if you sit down, and you know, work with them and become one of their peers, they would understand. And of course, you have to compromise. In the end, there's a lot of compromises, and you have the line that you draw, and you say I cannot go any further than this line. But more often than is, it's very rare that that happens, you could always find a middle ground that would help society, will help the people and you will get the job done takes a lot of negotiation. I think it's communication, negotiation skills, and strategizing.

Bret Kugelmass
It's so interesting, because the more that you talk about this, the more I didn't realize how little I knew about the banking space. You know, I thought it was all numbers. And now you're telling me there's actually quite a lot of psychology to it almost.

Angel Eduardo Cardenas Sosa
I would probably say, not 50%. But a lot of it's solving problems. I mean, you become a sort of a fixer, in a way, but again, it depends on the role. I mean, I guess when I was more of a project analyst, team leader, I would still do a lot of this, but I would have to make sure my sensitivity analysis was right. And you know, I would do a lot of negotiation with my environmentalist, to understand what the conditions are, what the covenants of the contract are, and where they need it for how can they make sense in light of the regulatory framework, that we were in the country and also talk to our lawyer in the transaction, to get their feedback and synthesize that into? I always say, into a manageable solution for the counterpart and for the bank.

Bret Kugelmass
So yeah, tell me more about the team because you mentioned you have a whole team with you. And you mentioned one of the roles that maybe you had earlier, which was the role of an analyst. What are some of the other roles that comprise this team that you run?

Angel Eduardo Cardenas Sosa
So why don't you have let's say, for instance, so, you have a project team that is in charge of a transaction or a program. And that could be a loan, but we see it as a project, you know because there is financing for X infrastructure or X investment that would have X or Y benefits. And then normally you would have ahead of that project deployment team leader or the task team leader and then you would have an environmental person that would do the social and environmental assessment of the project, you would have a financial analyst that would make sure the forecasts and projections of the project would make sense and you would have a technical person and there could be many, because I mean, for instance, I mean, we work in a lot in cities, city projects or urban projects. Urban projects at times have different components, have roads, but also have water, and you would have different sectoral expertise that is required. And you would have different people that would have that expertise, you would have a lawyer, because in the end, whatever you agree to in that evaluation has to come in a contract. And it has to be proofread, approved, and more importantly, signed, and you would have also, depending on if it's needed or not, external consultants that could help. So that would be the core. And that would be the team that would be in charge. And you would also have the people that are in the country offices in our offices, local offices that manage more of the relation, or more customer relations or more in terms of like, you know, managing the counterparty more from a commercial standpoint. So you will have that team. And then that team will interact internally with other teams, the risk assessment team that will see from an independent perspective, what are the risks we're seeing, and the mitigations we're proposing? And they would also have a saying that they would say, Well, you know, we think you could probably do better if you demand these instead of this. And, you know, we are careful with this, because you may have overlooked this. And you would also have a syndication team, I mean, if you need if you're in need to, to raise funding for like, let's say, another part of the product, because it's such a huge ticket, and you need more money. So you would have a specialized team that would actually have the connections and the relationship with all the banks, private and public sector development banks, that would actually be interested in participating with you in this transaction. So that, the core team would be the project team. So and then you have a larger team, my team, for instance, right now, where I have project team leaders, and also have all the orders that could component could make part of that project team, and also have the people that manage or administer, or does the portfolio management of our transactions that are already in disbursement process, because that's another, that's another of our responsibilities, we also meet, I mean, our life doesn't end when we approve our life ends when it's built. And you have to monitor and see that he's being compliant. And we have annual visits, and we have all types of controls in check. And, you know, we work with our counterpart to make sure that I mean, what we envision or thought at the beginning of the origination and the approval process ended up being in the actual construction or implementation of the product. So that's a larger team.

Bret Kugelmass
So are there certain sectors that you guys, for whatever reason, you know, due to the circumstances of today, that you guys are more focused on than others? I know, we've talked about, you know, infrastructure across transportation and communication going into 2021. Through 2025? I'd say, Is there one focus that's increasing in prominence?

Angel Eduardo Cardenas Sosa
I would add to the two you mention energy, and I would say social infrastructure. I think I mean, when you look across Latin America, there is a huge need for water. I mean, I think there are still out of 600,000,020 to 25 million, or around that, that don't get access to drinkable water in your region. That is a country that is a fair-sized country.

Bret Kugelmass
And why is that? What is the biggest challenge with water? Is it that they live far away from fresh water sources? Or they don't have the plants that add the chemicals and processes to clean it up? Where does the lack of drinkable water come from?

Angel Eduardo Cardenas Sosa
I mean, the first one we definitely don't have. It all depends. And I think it's also a myriad of issues. One of them is a lack of proper infrastructure. And the other one is also that you have a lot of population that would move or migrate to urban areas from rural areas for whatever reason. And when they settle and displace it, I mean, these areas don't have any, any infrastructure and they tend to get their water from rivers that are probably polluted and, or don't get any access to it. That's an example of that. But, I mean, so we're working a lot on that. And we're working on a lot of urban infrastructures. And I think the key here is to think about how large America is, it's one of the most urban continents in the world. And what's been happening is a lot of migration from rural areas to urban areas, and the urban areas haven’t been prepared or ready to receive so many people. So you have to, you know, step up and adjust to their requirements. And that takes time and takes a lot of resources and financing to, to do that, and also takes a lot of organizing and governance issues, because it's not only to protect infrastructure, but it's also to reassess the cities as a whole and, and make it work the brains that you have many fronts at the same time because I mean, you would say, well, from a trading perspective, you need roads and perspective, and its roads, but if you don't have energy, but then you could have degeneration, but you don't have the distribution capabilities. But then if you don't support the education sector, and the reforms do maybe not, you might not be helping the population to step out, again in terms of what is required in this 21st century. So I think I mean, we wish we had more resources, and we wish we could work more, but because there are many fronts at the same time. But again, to answer your question, it's, I think, the economic infrastructure I mentioned, and I would also say a lot of water. It's our key, and a more and more our environmental agenda, it's very important as well.

Bret Kugelmass
So as we wrap up here today, maybe you could just share more broadly with us your you know, your vision for the future, and what type it you know, what is your kind of strategic influence moving forward? And, you know, what type of world do you want to say?

Angel Eduardo Cardenas Sosa
I'm probably gonna say this more on a personal basis than necessarily on a corporate basis. And so I think we're definitely moving to, I mean, for a new strategic perspective, there are many issues that need to be told. I mean, I think the first one for sure, it's inequality. I mean, we definitely need to tackle the issue of inequality that has been persistent for many years. And it has worsened in the last year after the pandemic because you're seeing the consequences of that, and a lot has to do with education. You know, I mean, you need to educate, hopefully, help societies to the kids and young people to be capable to be competitive and to be able to participate there, in the market labor and labor market in the next couple of decades. So that's one issue. The other one, it's, it's for sure, climate change. So I mean, when you look at, I mean, what's happening, global warming? I mean, you were talking about migration. Not long ago, more of this migration is for economic reasons. But you're also seeing, not necessarily in Latin America, but it could happen but around the world. Climate change migration, I mean, you take the example of Bangladesh or India, I mean, people are in need to leave their house, their homes, because of the climate conditions that are taking place, and they don't find any subsistence or any capabilities to find food and would definitely put pressure from the government's perspective in urban areas. I would also think that the third issue would definitely be traded. I mean, we need to be capable of trade more inter regionally and hopefully to scale and benefit from the scalability of our capability, we do that and we also help the inequality issue in terms of job creation. So I would probably say that, if they asked me personally, that those would be at least the strategic activities or three strategic points that I would bring. And, you know, your second question is, it's more of a philosophical word, but I think we need to learn that what we've learned in the past, that's unnecessary would not necessarily apply in In the future, I mean, we need to understand the energy transition and how that's going to shift. I mean, our economy, our even our political perspective, and our geopolitics, we also need to be thinking, as we learned, that what we learned in the past and doesn't necessarily would apply anymore, we need to be open to technological innovation. So that's, you know, I mean, you keep hearing all this fear about you know, or what's going to happen in the next 20 years in terms of job displacement, or job elimination. And I think we have to be more positive about it. And we understand that we have conquered as a human as humans, I mean, it's just a sign of success and progress. And we can continue that, of course, and I think that's something that I would like to see in the next 30-40 years into, or it's that we develop more inclusive governance structures, you know, that could give more sane to the ones that are that need to say more, and we can actually listen to them. Again, it's very philosophical, the question but, but if one of those three happens, I think I would be happy, you know, so.

Bret Kugelmass
Well, we can end on a better note than that. Angel, thank you so much for taking the time today. I know I appreciate it. Our audience appreciates it and can't wait to talk to you again soon.

Angel Eduardo Cardenas Sosa
Thank you very much.