Board approves loans for US$129 million

(Caracas, July 15, 1992).- During the 74th Board Meeting held in Caracas on July 14 and 15, loans were approved for US$120,810,000 basically to finance key projects in the energy sector of some member countries.

The meeting was chaired by Ecuadorian Minister of Industry, Commerce, Integration and Fisheries Juan Falconi. Also attending were 11 principal directors and eight alternates, representing the five member countries and the private bank shareholders.

The Board’s most important decision was to establish the conditions for subscription of 1,025 "C" series shares by the government of Chile.

As a result, the entry of Chile into CAF capital will probably be signed next August in Santiago when CAF President & CEO Enrique García will travel to the country.

EDELCA to receive US$55 million Among the loans approved, the highest amount (US$55 million) will go to the utility CVG Electrificación del Caroní (EDELCA) of Venezuela to partially finance the Macagua II Hydroelectric Plant Project, located near Ciudad Guayana.

EDELCA will generate about 95% of Venezuela’s electric power. The utility is owned by the Raúl Leoni Plant located in Guri, one of the largest in the world.

Execution of Macagua II began in 1987 and the first generating units are planned to come into operation within two years.

This is a high priority project for Venezuela because it will meet the growing energy needs of the large industries located in the Guayana region, especially the aluminum producers.

Ecuadorian energy sector For the Ecuadorian energy sector, two loans were approved for a total amount of US$68.1 million.

The first loan for US$38.1 million is for Empresa Estatal Petróleos del Ecuador (PETROECUADOR). The executing body will be PETROAMAZONAS, its most important subsidiary, which produces 75% of domestic production.

The loan will finance an investment and development project for three oil fields (Anaconda, Palanda and Pindo) located in the northeastern area, Sucumbios province.

This project is important for the country because the oil sector generates large amounts of foreign currency for the country. Crude production in Ecuador currently exceeds 10 million barrels a year.

The second loan for the Ecuadorian State, for US$30 million, will be used for a project to cleanup and rehabilitate the distribution systems of the electricity utilities in order to cut energy losses.

The executing body is the Ecuadorian Electrification Institute (INECEL) which has received five loans from CAF.

Support for Peruvian privatization process A contingent technical cooperation operation was approved for the Peruvian Private Investment Commission (COPRI), which is responsible for selecting the companies to be privatized, and guaranteeing the consistency of the process of transferring public companies to the private sector.

CAF will provide US$500,000 to cover expenses for consulting or other services required to support partial or total privatization of the companies selected by COPRI.

Loans to Bolivia Banco Hipotecario Multibanco of Bolivia will receive a US$5 million loan for the global multisectoral credit program which will grant sub-loans to private companies for medium- and long-term investment projects.

A non-reimbursable technical cooperation operation for US$210,000 was approved for the Central Bank of Bolivia for an institutional support program to cover consulting expenses generated by the restructuring program.

Since the start of its operations until the first half of this year, CAF has approved operations in favor of Bolivia totaling US$2,210,000, not including foreign trade operations.