Contribution for upgrading of national road network

(Caracas, July 9, 1993). -- CAF today granted a US$30 million loan to the Republic of Ecuador for the National Road Program. The objective is to raise the level of service and improve administration of the country's road network in order to reduce the impact of transport costs on the prices of products.

The executing agency is the Ministry of Public Works and Communications (MOP) through the Public Works Department. It is estimated that 80% of Ecuador’s almost 40,000 km of highways are in a deteriorated condition, which especially affects transport of goods and passengers from production centers to centers of consumption and export.

Part of the National Road Program will be cofinanced by IDB and CAF through a Multiyear Investment and Maintenance Program to be implemented from 1993 to 1997.

The IDB/CAF contributions, which total US$150 million (27% of the total cost of the multiyear program), will be used to conclude certain works, increase road maintenance, institutional strengthening, execution of economic and environmental studies, and weight control.

The agreement was signed in CAF headquarters in Caracas by CAF President & CEO Enrique García and Ecuadorian ambassador in Venezuela Ximena Martínez de Pérez.

Solidarity support With the signing of this agreement, a US$9 million disbursement (30% of the total loan) will be made to finance the rehabilitation works needed to relieve the damage caused by the natural disaster which took place a couple of months ago due to the overflow of the River Paute.

The CAF president said advance disbursement of the loan was an exceptional operation, "it is an example of the effective support which the Corporation offers in solidarity with its member countries."

When the tragedy occurred CAF also approved a non-reimbursable technical cooperation operation for almost 300 million sucres to increase a CAF fund established for creation of craft and microenterprise productive units in the affected areas.

García added that the institution the heads was collaborating on achieving an adequate physical infrastructure and fluid border traffic between the five member countries as a way of improving the competitiveness of Andean products in the subregional and world markets, and developing intercommunication between these countries by uniting their distinctive geography.

The CAF chief said he was very pleased with CAF’s image on international financial markets, which had been strengthened by obtaining investment grade rating from two prestigious rating agencies: Moody's and Standard and Poor's. Both agencies separately analyzed the institutional record, quality of loan portfolio and other financial indicators before assigning the high rating. The Corporation is the only Latin American bank to have received this double rating.