Important financing confirmed for Ecuador

In a joint declaration signed today in the Carondelet Palace, the Andean Development Corporation (CAF) agreed to grant Ecuador financing of US$2 billion for the 2003-2006 period. The declaration was signed by CAF President Enrique García, Economy Minister Mauricio Pozo. President Lucio Gutiérrez was present as witness of honor.

The new funds are destined for both public and private sectors, with emphasis on programs and projects in the following areas: 1) poverty reduction and support for the social sectors in most need; 2) stabilization and sustainability of the economy in order to promote competitiveness, governance and reform of the State; or 3) sustainable infrastructure to strengthen productive capacity and regional integration; 4) decisive and explicit assistance for the productive sector, including small and medium-sized enterprises (SMEs), by means of important financial resources; strengthening of the financial sector and development of capital markets; and 5) environmental conservation.

García emphasized the Corporation´s commitment to integrated support for SMEs in the form of technical assistance, financing and contributions to capital strengthening, through the Business Development Investment Fund (FIDE). The CAF will also intensify its assistance for communities, microfinance, crafts and cultural development through the Human Development Fund (FONDESHU).

The assistance will be supplemented by a contribution of non-reimbursable technical cooperation funds of approximately US$5 million during the period. These resources will be used mainly in the areas of governance, institutional strengthening, competitiveness, consolidation of the decentralization process and modernization of regulatory frameworks.

The declaration stated that CAF approvals for Ecuador totaled US$2.44 billion in the 1997-2002 period, which positioned the institution as the multilateral organization that provided most resources to Ecuador in the period with a relative share of 68%. At the end of 2002, CAF´s direct portfolio in Ecuador totaled US$1.12 billion, almost five times higher than the 1992 level of US$236 million. The Ecuadorian portfolio represents 18% of the institution’s total direct portfolio. It is important to note that the net flow of resources from the CAF to Ecuador has always been positive.