Finance for projects vital for Colombia-Venezuelan integration

CAF granted a pre-investment loan to the Republic of Venezuela for US$1,700,000 to partially finance the technical, economic and environmental feasibility studies, and the final engineering for construction and/or rehabilitation of four Colombian-Venezuelan integration highways, to be executed by the Ministry of Transport and Communications (MTC).

CAF President & CEO Enrique García said the Corporation had been supporting a series of projects related to physical infrastructure and border integration which have been given priority by the national government. Previously, CAF had granted the Ministry a non-reimbursable technical cooperation grant – for US$14,400 – for preparation of the terms of reference of the studies.

CAF’s mission is to support the sustainable development of all the shareholder countries and regional integration. The international financial institution is formed by the five countries of the Andean Community, in addition to Brazil, Chile, Mexico and Trinidad and Tobago.

Support for infrastructure In the context of the processes of globalization, opening and competitiveness, CAF is implementing a broad support plan for development of physical infrastructure, supply of services and cross-border integration, considering that an adequate provision in this respect is a basic step toward creating an expanded economic space, with larger and more effective markets for products and services.

In the last four years CAF has financed 50 infrastructure projects - including provision of basic services such as electricity and telecommunications - for US$1.80 billion, of which 15 (US$700 million) relate to the private area.

Dynamic border The Colombian-Venezuelan border, between Táchira state and Norte de Santander department, has the highest level of commercial activity not only in the Andean Community, but in all Latin America. As of December 1995, Colombian-Venezuelan trade - especially nontraditional products–topped US$2 billion. Over 80% of this trade was by road. These roads will also help develop the Andean Free Trade Zone by stimulating trade between Venezuela and the other Andean countries.

The projects The pre-investment studies, partially financed by CAF, involve execution of four priority road projects which will establish effective and practical road communication channels between Colombia and Venezuela, develop closer commercial relations, and improve traffic flow of goods, people and services. These projects relate to the following roads.

San Cristóbal/ Rubio/ San Antonio/ Ureña Highway. This 58.8 km highway will link Táchira state in Venezuela with Norte de Santander department in Colombia.

La Fria/ La China Highway. A 15 km straight-line road. The existing rural road has to be upgraded.

Ureña/ La Mulata/ Border Line Highway. The 12 km road will connect with the existing Colombian San Faustino/ La China highway and later with La China/ La Fria mentioned above.

El Piñal/ El Nula/ Border Line Highway. The 90 km road connects the Venezuelan states of Táchira and Apure with the Colombian department of Arauca. Some of the studies for these sections are well advanced, and some have already been built.

Simultaneously, CAF is evaluating other road integration projects between northeast Brazil and southern Venezuela with a view to opening a commercial corridor to stimulate the economies of these regions.