CAF grants US$147 million loan to Venezuela

The Andean Development Corporation (CAF) today signed four loan agreements with the Republic of Venezuela, which grant a total of US$147.5 million to the country for sustainable infrastructure projects.

The CAF executive president, Enrique García, signed the agreements with the director general of public finances of the Ministry of Finance, Jesús Bermúdez.

García said the set of projects to be financed included US$100 million for the Multi-Sectoral Public Investment Program 2001-2002, whose objective is to guarantee the Venezuelan government’s public investment targets for the two-year period, preventing the possible suspension of the plans due to the contraction of oil revenue.

The Program covers investments to upgrade the country’s physical and social infrastructure in three sectors: transport, education and agricultural development. The CAF will contribute 70% of the total estimated cost of US$145 million; the national executive will finance the remainder. The executing agency is the Ministry of Finance.

Another project to be financed with the CAF funds is the sewage disposal system of the Valencia Lake Basin, which receives US$20 million. These sanitary engineering works will bring environmental benefits through improvements to the sewage treatment systems of the localities in the area of influence of the lake, which has high levels of pollution caused by the dumping of untreated sewage.

In 1999, the CAF approved US$20 million for investments in Carabobo state. This time, the funds are to be used for investments in Aragua state. The total cost of the project is estimated at US$167 million, of which the CAF will provide 24% through two loans of US$40 million. The other sources of financing are the IDB, bilateral loans and contributions from the National Executive. The Ministry of the Environment and Natural Resources is the executing agency for the project.

A US$17.5 million loan was also granted for the Expansion and Upgrading Project for the waterworks of the Losada-Ocumarito system, which serves the Tuy Medio region to the south of the Caracas Metropolitan Area. The project consists of a series of works involving the drinking water and sewage treatment services and clean-up of the System, which is managed by Hidrocapital, the Caracas region water utility.

The area has a fast growing population which is expected to continue to grow because of the Caracas-Tuy Medio railroad now under construction. In addition to the engineering works, the loan has components designed to improve the commercial and operating management of the Losada-Ocumarito system. The CAF will contribute 70% of the total cost of the project which is estimated at US$25 million. The remainder will be financed by contributions from the National Executive. Hidrocapital is the executing agency for the loan.

A fourth project to be financed by the CAF is the program for supplementary studies for development of the Western Region, by means of a US$10 million loan to support the regional development plan through pre-investment studies in the Western Region - Zulia state.

The loan will be used to finance environmental studies for a regional deep-water port, more efficient transport system and studies for the conservation of basins and improvement of water services in the Western Region. The total cost of the program is estimated at US$17 million, of which the CAF will contribute 60%. The remainder is to be financed by contributions from the National Executive and the Zulia state government. The executing agency is the Planning Ministry, which will coordinate the projects with the regional development corporations Corpozulia and Corpoandes.