Loans for US$60 million approved by CAF Executive Committee

(September 15, 1992?).- Three loans for a total of US$60 million were approved by the 39th meeting of the CAF Executive Committee held in Caracas on September 14.

SUDAMTEX de Venezuela One of the loans for US$30 million will be used to expand and modernize a textile plant owned by SUDAMTEX de Venezuela CA SACA, to increase its production of yarn and finished fabrics by over 50% (from 26 to 40 million m² a year).

With the loan, the company is assured of obtaining the most modern production systems and a constant flow of advanced technology, as well as increasing the flow of foreign currency into the country from its exports.

With activities in the Andean Group, Mercosur, the European Common Market and the United States, Sudamtex is a Venezuelan group with international projection in the vanguard of the Latin American textile industry, formed by companies based in Venezuela, United Kingdom, Uruguay, Argentina and Colombia.

This modern industrial conglomerate - located in the city of Maracay on an area of 241,000 m² - is an open-end stock corporation whose shares are actively traded on the Caracas and Maracaibo stock exchanges.

Its activities cover a diversified line of processes and products, including cotton cultivation and processing, fabric preparation and marketing, fabrication of polyester and nylon polymers, acetate filaments and fiberglass.

CAF recently granted the company a US$10 million line of credit to finance its foreign trade operations.

Border integration The meeting also approved a US$25 million loan for the government of Bolivia for construction of a highway section to connect Beni and La Paz departments, with a later extension to the border with Peru.

With a total cost of US$197 million, the project has high integrationist content since it will facilitate Bolivian access to the Peruvian port of Ilo, and be cofinanced by several international organizations, including, apart from CAF, the Inter-American Development Bank, KFW of Germany, and USAID of the United States. Part of the financing (8.6%) will come from local contributions.

On January 24 this year, Peru granted Bolivia a commercial, industrial and tourism free zone in Ilo, located 1,145 km kilometers south of Lima, which guarantees the country access to the Pacific Ocean for export of its products to international markets.

The road project - in whose financing CAF is participating - will improve the Bolivian section of the Pacific corridor, stimulating development of exports and tourism. It will also increase the competitiveness of productive sectors by cutting transport costs between production and consumption centers, and the border passes to the Pacific.

This project consists of construction of a 50km section of highway between Cotapata and Santa Barbara, together with upgrading and paving of 100 km between Rio Seco and Desaguadero. An environmental protection program will be implemented jointly to protect Andean and Amazon vegetation, and preserve existing archaeological sites. Complete engineering and environmental impact studies are available for this purpose.

CAF president & CEO Enrique García said the project was important for the Corporation "because it will stimulate private sector investments in production of non-traditional products for domestic and international markets." He added, "It will develop tourism in places of great natural beauty and archaeological interest, as well as the border area with Peru."

The executing body is the Bolivian National Road Service (SNC), public body attached to the Ministry of Transport and Communications. To date, CAF has granted nine loans to SNC for a total of US$90 million.

Ecuador A third loan for US$5 million was granted to the Ecuadorian financial institution Filanbanco for a multisectoral credit program.

This loan will be used to finance projects for small- and medium-sized industries, especially the industrial, agro-industrial, fisheries and tourism sectors.

Technical cooperation for Colombia The CAF Executive Committee approved a non-reimbursable technical cooperation grant for the University of the Andes (UNIANDES) of Colombia for US$500,000.

In 1985 UNIANDES began, jointly with IDB, a program for training and research on socioeconomic evaluation of projects. To date, two phases have been completed and 908 professionals trained, many of them from Bolivia, Ecuador, Peru and Venezuela.

In January 1993, the third phase of the program began with activities which will benefit the Andean subregion.

CAF is granting this cooperation because it will provide technical support to public officials from the Andean area (at pre- and postgraduate level), as well as short-term consulting services.