CAF supports social and transport programs in Venezuela

(Caracas, June 28, 2006).- The Andean Development Corporation (CAF) approved US$850 million in three operations for Venezuela. The first two, which total US$800 million, support the Republic in the execution of part of its public investment programs, at the same time as releasing resources for budgetary management. Half of the amount relates to the Habitat Program, and the other US$400 million is for the Mass Transport Public Investment Program. CAF also approved the issue of a Partial Credit Guarantee for US$50 million for the utility Electricidad de Caracas.

CAF President & CEO Enrique García said that this set of approvals confirmed the development bank as the main source of multilateral financing for the Bolivarian Republic of Venezuela, which received loans for US$3.48 billion during the 2001-2005 period.

The primary objective of the Habitat Program is to support the National Government Investment Plan with the provision of housing, habitational development and habitat upgrading to improve the living conditions of at least 120,000 socially vulnerable families. Providing these families with their own homes reduces the probability that they will fall into structural poverty, facilitates access to credit, enhances self-esteem, and integrates them into a way of life that preserves the environment since the Program integrates the concept of habitat with housing.

The other $400-million loan approved for Venezuela supports the Mass Transport Public Investment Program, whose main objective is to guarantee a rapid and efficient service to the population.

This program is associated with public investments in five metro systems currently in construction: Line III of Metro de Caracas – El Valle–La Rinconada Section; Line IV of Metro de Caracas – Capuchinos–Plaza Venezuela section; Metro de Los Teques; Metro de Valencia; and Metro de Maracaibo. This program has national scope, specifically in the Caracas Metropolitan District, Altos Mirandinos, Valencia and Maracaibo.

As with the Habitat Program, this CAF loan will contribute to the execution of the Venezuelan government strategy of reprofiling the national public debt, and partially replacing the funds used by the National Treasury to finance mass transport projects.

Support for the Venezuelan private sector Lastly, as one more example of CAF support for Venezuela, a Partial Credit Guarantee was approved for issues of bonds denominated in bolivars on the domestic capital market by Electricidad de Caracas.

"With this transaction, CAF is playing a very important catalytic role by contributing to the development of the capital market, and strengthening the private sector through structured operations, which opens access to longer-term funds in local currency," García said. Additionally, joint participation with local financial institutions strengthens CAF’s role with the Venezuelan financial system.