CAF in Venezuela: a solid growing relation

The Bolivarian Republic of Venezuela and the CAF maintain a solid growing relationship reflected in the multilateral institution’s support for medium- and long-term investment programs and projects for infrastructure, and modernization or expansion of companies in priority sectors, with the backing that Venezuela has given the Corporation since the start of its activities.

The CAF loan portfolio in Venezuela breaks down into 92% financing of infrastructure projects, 5% lines of credit for commerce and working capital, and 3% manufacturing and other economic sectors.

In 2003, the amount approved for the country was US$535 million, 16% of CAF’s total approvals of US$3.30 billion. An amount of US$458 million was destined to finance sovereign risk projects in the transport, storage, communications, electricity, gas and water supply sectors. Disbursements totaled US$337 million and the total portfolio was US$1.29 billion.

One of the most significant approvals was the US$100-million loan for the Caracas-Tuy Medio section of the National Railway Plan. This project forms part of the National Railway Plan that the government is executing to diversify the use and increase the capacity of the inter-regional transport system.

A US$100-million loan was approved for the Los Teques Metro Project tol improve mass transport in the city and connections with Caracas.

Two more loans approved were US$100 million for Metro de Valencia to provide a rapid transport service for the city of Valencia; and US$58 million for Metro de Caracas for works and equipment to complete Line 4.

A US$100-million loan was approved in 2003 for the CVG Electrificación del Caroní (Edelca) to meet the country’s growing need for electricity, through the improvement and repowering of the interconnection network of the national transmission system.

The CAF also granted loans to finance foreign trade and working capital for a total of US$76 million in favor of a group of clients.

Technical cooperation and Fondeshu funds totaling US$1 million were allocated for governance, competitiveness, sustainable development, integration and community development.

Historical background

In the last five-year period (1999-2003), Venezuela obtained approvals for US$2.47 billion, including US$200 million for the Public Investment Multi-Sectoral Program (2002-2003) to improve infrastructure in various sectors with the aim of raising the quality of life of Venezuelans and stimulating sustainable human development.

The multilateral also approved finance for pre-investment studies for projects in the South American Regional Infrastructure Integration Initiative (IIRSA).

During the five-year period, disbursements in favor of Venezuela were US$1.77 billion, representing 17% of the total amount disbursed by the CAF (US$10.15 billion).

Loan portfolio

In the total portfolio of loans and capital investments in the five-year period, the CAF contribution was directed into development of projects in both public and private sectors. During this period, total loans and capital investment with Venezuela, including the portfolio managed for third parties, grew steadily from US$1.03 billion in 1999 to US$1.30 billion at the end of 2003.

Social and cultural action

As the host country of the CAF headquarters, Venezuela has become the scene for the cultural and social activities, which are held in the Antonio José de Sucre Auditorium and the CAF Art Gallery.

These spaces have offered high-quality exhibitions and presented concerts by prestigious musical performers.

The highlights of the cultural activities were the Bordes, Vertientes del Sur and Molas exhibitions, all held during 2003, which received excellent reviews from the specialist critics, and the concerts given by the Bolivian guitarist Piraí Vaca, the Venezuelan jazz musician Marisela Leal, the Peruvian vocalist Susana Baca, and the Uruguayan tango singer Yamandú Pereira.

The CAF backed craft management projects in alliance with the Venezuelan Foreign Trade Bank (Bancoex); supported the heritage school workshop of La Guaira on the central coast, in alliance with the Spanish International Cooperation Agency (AECI), as well as musical instruction in its orchestral, choral and lute sections.

In 2003 an alliance was formed with the Santa Teresa Foundation and Revenga Municipality, in the central area of the country, to start the Rugby sports program, which is a tool to integrate and organize training for young people with conduct problems as a contribution to their rehabilitation.

The Project Paria Foundation and the campesino communities who cultivate cacao received assistance for the start-up of an integrated program to supplement their productive work with activities of community saving, health, education and culture.