CAF and Ecuador sign loans for US$430 million

(Quito, December 11, 2007).- CAF President & CEO Enrique García and Ecuadorian Minister of Economy and Finance Fausto Ortiz signed in Argentina two loan agreements in favor of that country. The first agreement is for US$180 million under a Contingent Line of Credit, and the second for US$250 supports the Human Development Bond Program (BDH).

The operation under the Contingent Line of Credit supports execution of the public debt strategy that the ministry has been successfully implementing in recent years with the objective, among others, of deconcentrating amortizations and extending the terms of the country's domestic public debt.

The CAF president said, "The line of credit supports achievement of the objectives set by the Ecuadorian government, first, by ensuring contingent funds for financing operations that arise in the framework of management of public liabilities aimed at improving the debt profile and risk mitigation, and, second, by guaranteeing increased availability of budgetary resources to respond to other priorities of the government's development policy." "This operation is also part of the agenda agreed by Ecuador and CAF to improve the efficiency of execution of public expenditure," he added.

US$250 million for Human Development Bond

The US$250-million loan will be used to support the Human Development Bond Program. The objective of the program is to promote permanent access to the education and health sectors by the most vulnerable sectors. The executing agency of the program is the Ministry of Economy and Finance, in coordination with the Ministry of Economic and Social Inclusion.

The Human Development Bond is the most important intervention area in the Ecuadorian government’s Social Protection Program. The Bond protects the level of consumption of the poorest families through the mechanism of conditional monetary transfer which benefits approximately 1.2 million vulnerable households and opens access to basic education and health services for over 2.6 million children.