$625 million approved to finance projects in Bolivia, Colombia and Ecuador

The Andean Development Corporation (CAF) today approved at its CXVII Board Meeting held in Caracas operations for $625 million in benefit of Bolivia, Colombia and Ecuador to finance infrastructure projects, along with a loan to support Colombia´s economic program.

CAF Executive President Enrique García today presented the 2003 Annual Report to the Corporation´s Board and Shareholders Meeting, which was unanimously approved. The report highlights the record level of approvals of $3.30 billion and the record net profit of $135.5 million.

García said that as a complement to its financial activities, the CAF had been promoting a set of actions aimed at defining a renewed development agenda that promotes efficient and equitable integration into the global economy and a reduction of levels of poverty and inequalities. To do this, it is necessary to go beyond the objectives of macroeconomic stability to achieve a sustainable growth that is inclusive, participative, and respectful of cultural diversity and the environment.

The CAF gives priority to programs and projects that offer specialized technical assistance for activities of regional integration; export promotion; environmental, cultural and community projects; and support for SMEs, among others.

In 2003, shareholder countries contributed $234 million, the largest volume of capital in a single year, which confirms these countries’ confidence in the Corporation, and constitutes a source of strength that is expressed in the maintenance of first-rate risk ratings on capital markets.

No less important is the CAF´s presence on international markets with issues of $1.51 billion in 2003, especially the Condor Bond issue for investors in the region, and the $500-million issue on the US domestic market, which is the CAF´s largest in that market.

The meeting also designated the new rotating presidency of the Board and the Shareholders´ Meeting, exercised by Peru in the March 2003-March 2004 period. Venezuela will exercise this presidency for the March 2004-March 2005 period through Finance Minister Tobías Nóbrega.

First Board Meeting 2004: approvals for $625

The Board meeting, the first of 2004, approved operations for $655 for Bolivia, Colombia and Ecuador. For Bolivia, funds were approved for a total $180 million, including $70 million to partially finance the Bolivian South Integration Road Project. The financing was completed with $120 million for an innovative financial guarantee for Banco do Brasil as agent of the Brazilian Export Promotion Program (PROEX).

The project finances the development and improvement of highways that are part of Bolivia´s integration and development hubs in the South American Regional Integration Infrastructure Initiative (IIRSA), particularly the Potosí-Tarija highway, also known as the Route of the Liberators, which is part of the Inter-oceanic Hub; and the Potosí-Cotagaita section which will eventually reach the city of Villazón to complete the high-altitude connection with Argentina.

Colombia received $400 million, including $150 million for the Urban Development Program and the Bogotá Urban Transport System: Transmilenio, the second loan granted to this system which has become a model for public transport in the region. The remainder is a $250-million loan to support the economic program of the National Development Plan, which is receiving finance from the IMF and other multilateral organizations. One of its main objectives is to strengthen public finances.

Ecuador was the third country to benefit from the CAF approvals. This country received $35 million for the San Eduardo tunnel project to be executed by the Guayaquil City Government to improve traffic on the Guayaquil road network and strengthen the economy and the social welfare of users. The CAF has extended various loans to the Guayaquil City through approvals that now total $250 million. These operations have made a substantial contribution to improving the road system and the quality of life of the city´s inhabitants.