CAF grants US$70 million in loans to Guayaquil

The mayor of Guayaquil, Jaime Nebot, and the president of the Andean Development Corporation (CAF), Enrique García, today signed in the CAF headquarters in Caracas a loan agreement for US$57 million for execution of Phase III of the Guayaquil Road Infrastructure Plan. Approval of an additional credit for US$13 million for a clean-up program for the Estero Salado area of the city was also announced.

Enrique García said these operations reflect the priority the Corporation gives to the financing of infrastructure projects compatible with environmental sustainability in its shareholder countries. The CAF has an important relationship with the Guayaquil City Government, which is reflected in its support for the investment plan for road infrastructure works designed by the city to deal with present and future traffic needs, he added.

This is the first direct operation with the city government, García said. The decision was based on the results of an evaluation by a specialized technical team with external advisers, which approved the city’s administrative and financial management. The city government will now take direct responsibility for the all the commitments resulting from the credit.

The CAF is interested in supporting the modernization of local institutions, such as the Guayaquil City Government, the executive president said. It is an example for other local governments in the region, which are hoping to gain increasing access to capital markets for their borrowing requirements for infrastructure works.

The CAF financed the execution of Phase I of the Road Program with a US$70 million loan approved in 1997 for construction and widening of avenues and streets. Later in 1998 the lender financed Phase II with a US$56 million credit for construction of avenues and two tunnels.

Phase III of the Road Program will reduce the level of traffic congestion between the port area, the historic and commercial center and the more recently developed northern area of the city, as well as complementing Phases I and II. The project includes work to extend and widen streets, urban developments and a park, with social and environmental characteristics.

Cleaning up Estero Salado In line with the objective of contributing to environmental decontamination projects, Enrique García announced the approval of a US$13 million loan for the Guayaquil City Government to finance Phase I of a clean-up program for Estero Salado, an arm of the sea that penetrates the city and is currently used for discharge of untreated sewage.

The project consists of building collectors, upgrading of works and the start-up of an education and awareness campaign. The project to recover this area of the city, which in the past was used for sport and recreation, should have environmental and social benefits.