Energy sector to receive the largest loan granted to Colombia

(May 19, 1995).-- The largest loan granted to Colombia was signed today in Bogota. The funds will go to develop the country's energy sector and contribute to improving its efficiency, competitiveness and capacity.

This US$100 million global multipurpose credit was granted to the company Financiera Energética Nacional (FEN), state corporation attached to the Ministry of Energy and Mines, with the purpose of financing public and private companies in the energy sector which supply goods and services.

The agreement was signed by CAF Operations Vice President Rodrigo Moscoso, and FEN President Alberto Montoya Puyana. The operation is the first under a cooperation framework agreement signed by the two organizations, and marks the start of an active support plan which CAF is planning to execute in Colombia in the energy sector.

Moscoso said it was important for CAF to develop this sector because "it increases power supply by means of a correct selection of sources, higher levels of efficiency and conditions compatible with the environment, which facilitates renewal of the productive base and raises the quality of life of the population."

CAF is also participating in the formation of the equity investment funds to promote development of private-sector electricity utilities, such as the Scudder Fund for Private Electric Power in Latin America and the Latin American Energy and Electricity Funds (FONDELEC). The latter fund had recently acquired equity in the Mamonal thermoelectric plant, which will supply electricity to a consortium of local private industries, Moscoso added.

On the loan granted to FEN, the CAF director said it would finance a series of operations, including investment projects, associated infrastructure works, acquisition of fixed assets, working capital and efficient use of energy, among others.

CAF - formed by Bolivia, Colombia, Ecuador, Peru and Venezuela - is the financial institution with the largest capital in the Andean Group and one of the three Latin American issuers which simultaneously hold investment-grade ratings from Moody's, Standard & Poor's and IBCA. The institution -- which celebrates 25 years of existence next June 8 -- includes among its shareholders Mexico, Chile, Trinidad and Tobago and 22 private banks from the Andean region. In the last five years, operations in favor of Colombia have totaled approximately US$1.85 billion.