Colombian urban transport and SMEs receive approvals for US$252 million

(Caracas, June 28, 2011).- "CAF’s actions in Colombia are supporting national policies, strategies and initiatives promoted by the public and private sectors to increase the level of economic and social development," Enrique García, president & CEO of CAF – Latin American development bank – said announcing approvals for US$252 million in favor of the country.

An amount of US$152 million was approved to co-finance the Urban Transport Program in Barranquilla and Montería. "With this loan, CAF is contributing to the sustainability and efficiency of Colombian cities, in a context of economic and urban growth which has prompted the country to develop a national policy designed to improve provision of public transport in urban centers," García said. He emphasized CAF's wide experience in supporting projects in the transport sector in several countries of the region.

"These investments will provide citizens with an efficient and competitive system with high levels of service. Implementation of the Urban Transport Program at national level will cover about 1,000 kilometers of urban roads, benefiting 24 million people living in the cities involved," García said.

The Urban Transport Program in Barranquilla and Montería, part of the National Development Plan implemented by the Colombian government, will be executed by the Ministry of Transport, with the participation of Transmetro SA and Montería Ciudad Amable SAS. Of the total cost of US$542 million, the CAF funds represent 28%, while 20% will come from local authorities, 34% from the private sector, and 18% from other national funds.

The Program will help implement the urban transport policy by providing finance for two cities: the Integrated Mass Transit System (SITM) in Barranquilla and Metropolitan Area, and the Strategic Public Transport System (SETP) in Montería.

Promoting the growth of MSMEs to speed up Colombian development

With the aim of promoting equitable regional development and aware that difficulty of access to credit is one of the main obstacles to the growth of MSMEs, CAF is promoting the design and use of innovative mechanisms to open up access to financing.

With this in mind, CAF today announced approval of a US$100 million facility for the National Guarantee Fund (FNG). The funds will be used to back in part a group of guarantees issued by FNG to grant US$800 million in loans to over 30,000 MSMEs in Colombia.

"The success of CAF’s actions is largely based on partnerships with local strategic partners, such as FNG, which share our interests and have proven capability in implementing programs geared to improving the financial conditions of MSMEs," García said.

FNG is the Colombian Government body which facilitates access to credit by micro-, small- and medium-sized enterprises by providing guarantees in favor of lending institutions.