Ecuador: CAF grants Ecuador a credit for road infrastructure and for developing competitiveness

The President of the Republic, Alfredo Palacio, signed the executive decree authorizing the signing of CAF’s credit for US$ 125 million. Also present at the signing was CAF’s President, Enrique García.

August 02, 2005

The Corporación Andina de Fomento, CAF, is to grant the Republic of Ecuador a credit of US$ 125 million for road infrastructure works under the Initiative for Integration of South American Regional Infrastructure (IIRSA) and for developing competitiveness. CAF thus ratifies its permanent support of member countries, in this case Ecuador, particularly as this credit falls within the concept that CAF has of infrastructure as a fundamental component for increasing the productivity and competitiveness of countries, along with the quality of services and other production factors.

This credit is part of the operations program for the period 2005-2006, which consists of US$ 1 billion. CAF is the main source of Ecuador’s multilateral financing, having issued in the past five years approvals amounting to US$ 1.9 billion and disbursements totaling US$ 1.5 billion for projects in both the public and private sectors.

The transportation sectorial component will permit the country and its different regions to have at their disposal a stable, effective, reliable, and permanent road infrastructure capable of withstanding the onslaughts of nature produced by cyclical phenomena such as El Niño, through the national master road plan and thanks to the Initiative for Integration of South American Regional Infrastructure (IIRSA).

The Competitiveness Support Program will also support Ecuador in aspects affecting the productivity of companies in crucial areas such as institutionality, raising productivity, furthering business development, developing clusters of products with added value and export potential, promoting free competition, creating the conditions for mass access to information technologies, and improving environmental regulations and compliance with those regulations.

Transportation and road systems

The transportation sectorial component consists of six projects that go under the name of the IIRSA Group and will permit the country to create an infrastructure aimed at regional integration via two main hubs: the Amazon Multimodal Hub, which will permit the use of several types of transportation for linking up the ports on Ecuador’s Pacific coast with the Atlantic basin, thus making the opening of broad horizons -the Asian and Brazilian markets, for example- a possibility; and the Andean Multimodal Hub, the objective of which is to link up major production centers and cities with the largest populations so that Ecuador becomes physically integrated into the Andean Community of Nations (CAN) as a market of raw materials, products and services produced in the region.

These projects will result in the establishment of an International Corridor through Ecuador (Colombia-Ecuador-Peru) as a gate to the Southern Cone and the creation of an international route for the movement of merchandise, in particular exports.

A second group of projects -fifteen in number that go by the name of the Sectorial Projects- will link up and harmoniously develop Ecuador’s territory and permit its Government to undertake the overhauling of the country’s road system, as well as the construction of new roads, thus providing solutions to domestic problems and complying with international agreements signed by the country.

Supporting Competitiveness

CAF’s Competitiveness Support Program (PAC) seeks to strengthen the country in the critical spheres of Quality, Productivity and Entrepreneurial Capacity; promote free competition in Ecuador; and strengthen Ecuador’s National Enterprise Incubation System and National Quality System. It also supports productive activities, the development of clusters with export potential, and promotes maquila or in-bond processing activity in the country. The plan also includes Support for Innovation, Technology, and Connectivity; promoting efficiency and transparency in public processes and in processing permits and other official documents; reducing business billing costs, increasing taxation controls; making on-line government, dealing with formalities and transactions on line, and e-billing viable; and supporting the mass use of information and communication technologies.

In addition, support will be given to activities in the spheres of Infrastructure and the Environment, in particular to the implementation of the Single Environmental Handling System.

The project also provides for Strengthening the Public Works Ministry as an Institution and for supporting decentralization efforts being undertaken by the Ecuadorian Executive.

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