IDB grants CAF US$18 million loan

Caracas (February 25, 1991).- A US$80 million funding loan was granted by the Inter-American Development Bank (IBD) to CAF for cooperation on execution of a Multisectoral Credit Program.

The agreement was signed on February 25 in the CAF headquarters by IDB President Enrique Iglesias, and CAF President & CEO Galo Montaño.

Under the agreement, funds will be channeled through CAF as untied individual loans to finance investment projects, foreign trade operations and operations to produce and market capital goods by the public and private sectors.

In the case of foreign trade finance operations, the funds from the program will be used to grant loans in the framework of the Andean Trade Financing System (SAFICO) and Letter of Credit Confirmation and Financing Mechanism from Third Countries (MECOFIN), which are support mechanisms set up by CAF for these purposes. In the case of project execution, the funds will be granted as financial facilities for acquisition of fixed assets or working capital for construction, installation and start up of the assets.

This operation is of great importance because it is the first freely usable loan granted by IDB to CAF, with the aim of forming a wider financing package for projects which come under the Multisectoral Credit Program.