Ecuador’s President makes an important visit to CAF

The President of Ecuador, Gustavo Noboa, today visited the Andean Development Corporation (CAF), where he had a meeting with this international financial institution’s executive president, Enrique García.

The meeting took place in the framework of the excellent relations that CAF has with Ecuador, in which CAF has lived up to its commitment to this country in support of the government’s successful economic program, by means of providing timely financing for the strengthening of the financial system and the carrying out of basic infrastructure projects that contribute to improve Ecuador’s social conditions and international competitiveness.

With reference to this, President Gustavo Noboa thanked CAF for the support it has given Ecuador, backing not only large infrastructure projects but also programs with high social content. “I wish to record – he emphasized -- our nation’s gratitude to CAF which showed confidence in Ecuador when no one else would look at us.”

In welcoming Ecuador’s head of state, Enrique García reiterated the Corporation’s commitment to its shareholder countries to strengthen and stimulate their efforts for development and regional integration.

The president of CAF said that in period from 1990-2001, the institution has approved loans of US$ 3,953,000,000 to Ecuador, and that currently more than 20% of the total portfolio is dedicated to that country. He added that on this occasion of President Noboa’s visit to CAF’s headquarters, they were signing two loan agreements for a total of US$75 million, to finance high social impact infrastructure projects, following the recent approval of a loan for US$25 million for the rehabilitation of the Baeza-Tena highway.

“By making these loans,” pointed out García, “CAF ratifies once more its commitment to Ecuador in its efforts to incorporate the neediest of its population into productive activities.”

Manabí Diversion Project The first agreement is intended for this project, which includes the construction of three diversion tunnels, in addition to reservoirs and pumping stations that take advantage of the water from the Daule-Peripa Dam in the province of Guayas, for various uses in the province of Manabí. CAF is financing US$50 million at 10 years, with 2 years grace, and the executing agency is the Manabí Center for Improvement (CRM).

The total project cost is US$277 million, in which CAF’s participation amounts to US$90 million. With this new loan of US$50 million, the Corporation will finance infrastructure works, an Environmental Management Plan and an Institutional Strengthening Program for CRM.

The Manabí province has a population of one million inhabitants, but lacks natural water sources of water supply; despite this situation, it is one of the production centers with the greatest potential for growth in Ecuador in the area of agriculture and shrimp cultivation.

Hope Plan, Phase II The second loan is for Phase II of the Hope Plan. CAF’s loan for this stage of the program is US$25 million, with a 10 year term and 30 months grace period, to contribute to the Government’s efforts to reduce poverty levels in Ecuador by means of initiatives that result in permanent solutions, aimed specifically at increasing production capacity and generating employment in the country’s poorest communities.

In particular, new alternatives are sought for human resource development by means of professionalization, technical assistance, financial markets and domestic and export marketing that will ensure the sustainability of productive activities. The goal of these endeavors is to raise the country’s marginal rural and urban population’s standard of living, thereby avoiding migration from rural areas to the city and abroad.

Given the positive experience with the Hope Plan, executed by the Ecuadorian Episcopal Conference during the last three years, with CAF’s partial financing of US$24.5 million, this second phase was designed to expand the social component with new projects. Additionally this phase will now incorporate Productive Development, which includes projects basically directed at increasing the productive capacity of Ecuador’s most vulnerable sectors.

Baeza-Tena Highway The above-mentioned prior loan is for US$25 million at 10 years with 2 of grace. It finances in part the Baeza-Tena highway improvement and correction project. The Ministry of Public Works and Communications will be the executing agency. Urgency was recognized in the approval of this loan given that the highway is in a zone affected by intense rainfall that has occasioned great human and economic losses.