Loan for tourism development

(Caracas, June 11, 1992).- CAF granted today a US$25 million loan to the Venezuelan government for a tourism development program.

The Venezuelan Investment Fund (FIV) - executing body of the program - will set up a trust fund with the loan jointly with contributions from the Inter-American Development Bank (IDB) and the national government for a total of US$150 million. FIV will then select qualified intermediaries from the private financial system interested in participating in the project by transferring the funds to the final beneficiaries of the program.

The project consists of granting loans to private companies to finance construction, remodeling and equipping of hotels of whatever category, and related services. These operations will generate foreign currency and employment, as well as stimulating regional economies and a more balanced development in the country.

By expanding hotel facilities, the program will have an immediate impact on employment in the construction sector and in operating and maintenance activities. At a later stage, jobs will be created in certain sectors of economic activity such as food preparation, crafts and transport.

The tourism sector is one of CAF's priority fields of action because it is a great generator of foreign currency and employment for the five member countries.

In Venezuela, despite its excellent location and important tourism potential, the sector has not been fully developed. Until the mid-1980s, hotels were mainly targeted at urban demand (Caracas), and were concentrated only in a couple of states, such as Margarita Island and the Barcelona-Puerto La Cruz corridor, which absorbed most investments in tourism. This program, apart from optimizing the tourism offer of this area, will stimulate the industry in other regions.

The agreement was signed in the CAF headquarters by CAF President & CEO Enrique García, and the director-general of the Ministry of Finance, Arístides Moreno.