CAF approves US$422 million to finance projects in Bolivia, Brazil, Colombia and Ecuador

(Caracas, March 21, 2006).- The Andean Development Corporation (CAF) today approved operations for US$422 million for the benefit of Bolivia, Brazil, Colombia and Ecuador. In the specific case of Ecuador, two operations were approved, one for US$250 million for the Program to Strengthen Debt Management and Quality of Public Expenditure, and another for US$43 million to cover supplementary works and the Annex Bridge to the Rafael Mendoza Bridge in Guayaquil. With respect to the support loan for the Program to Strengthen Debt Management and Quality of Public Expenditure, CAF president & CEO Enrique García said "the Ecuadorian government has accepted the challenge of addressing the urgent need for an agenda of specific actions on two fronts: public debt management and improvement of quality of expenditure in public investment projects." He added that "the agenda agreed by CAF and the Ecuadorian Ministry of Economy and Finance for this loan includes the activities of strengthening debt management to harmonize financing requirements with the opportunities and advantages of domestic and foreign markets, in a framework of optimal use of resources."

The other operation approved for Ecuador is a US$43-million loan whose main objectives are to facilitate and decongest the heavy traffic flow in areas of Guayaquil, La Puntilla and Durán, continuing the support CAF has been giving since the 1990s to strengthen the transport sector in Guayaquil and Guayas province, along with the South American Regional Infrastructure integration Initiative (IIRSA); resolve and prevent the environmental problems that affect the roads and their natural environment in the project’s area of influence; and improve living conditions in the area, reducing transport costs and facilitating access to services, markets and raw materials. The second beneficiary country was Colombia for which CAF approved an Uncommitted Revolving Line of Credit in favor of the financial institution BBVA Colombia for a maximum of US$50 million to finance foreign trade operations, working capital and investment projects, and the issue and confirmation of letters of credit.

Bolivia received US$40 million, comprising US$25 million for the Huachacalla - Pisiga, Oruro Integration Highway and a further US$50 million to support the Natural Emergencies Response Program. The first operation, García explained "is an important road section in the IIRSA initiative, uniting Bolivia with Chile, and the Pacific corridor with the Atlantic Ocean." The second program is aimed at strengthening rehabilitation and reconstruction of losses of physical, natural and social capital caused by the torrential rains in Bolivia in late 2005 and early 2006. Lastly, two operations were approved for Brazil: US$21.5 million for the Rondonia State Development Program Phase II, and US$18 million to support the Drainage Management and Urban Development Program in San José de Río Preto, San Paulo state. This is the first municipality to receive CAF finance in favor of decentralization and strengthening of the capacity of governments to execute their investment plans.