Operations for US$256 million approved by CAF Board

(Caracas, December 2, 1994).-- Ten credit operations in favor of the five member countries, the program of activities and the institution’s 1995 budget were approved by the CAF Board during its 83rd meeting on December 1 and 2 in its Caracas headquarters.

On this occasion, Venezuela received the largest amount of approvals ever granted to a public sector: US$98 million.

Chaired by the minister of Development and president of the Venezuelan Foreign Trade Institute, Alberto Poletto, the meeting was attended by the Bolivian National Secretary of Industry and Commerce, Carlos Morales; Colombian Vice Minister of Finance and Public Credit, Francisco Azuero; the ministers of Commerce of Ecuador, José Vicente Maldonado, of Peru, Liliana Canale, and high-level authorities from public and private financial development institutions.

"The operations approved for a total of US$255.5 million are evidence of the Corporation’s objective of actively promoting the sustainable development of the region, in which the private sector has increasing importance and participation," CAF President & CEO Enrique García said, adding that 41% of approvals would benefit, directly or indirectly, Andean private companies in the agriculture, fisheries, mining, industrial and financial sectors.

CAF, financial institution with assets valued at over US$2 billion, is formed by Bolivia, Colombia, Ecuador, Peru and Venezuela. Its shareholders also include Mexico, Chile, Trinidad and Tobago and 22 private banks from the Andean subregion.

Infrastructure programs to optimize public services, equity participations in favor of the regional financial sector, specific and global multi-sector loans, along with lines of credit to finance development of small- and medium-sized enterprises, also received CAF backing.

The amounts for public works will be used to finance major projects such as the Daule-Peripa-La Esperanza Water Transfer and Optimization of the “Papallacta”Drinking Water System in Ecuador, and the Global Urban Transport Plan in various cities of Venezuela with acquisition of wagons for Line 3 of Metro de Caracas.

In the financial area, equity participation in Banco Industrial and the Global Leasing company, both in Venezuela, were approved. The objective of the contributions is to strengthen the capital of these institutions in view of the enormous potential for development as a consequence of the process of stabilization and growth of the Bolivian economy.

In line with its role as multiservice bank oriented to meeting the needs of a wide range of clients, the Corporation also granted multi-sector loans and increased existing lines of credit with financial institutions in the region. In this respect, US$102 million was approved to finance, expand and modernize a number of companies in the private sector, through Colombian financial institutions such as IFI and Corficolombiana, and the banks Wiese and Crédito in Peru.

"These actions are part of the structural reform process started by our countries, where market forces are being revalued and the scope of state intervention reduced," García said. An important characteristic is that the funds to be disbursed come from a variety of sources," result of a management strategy aimed at diversification and reduction of operating costs," he added.

In less than two years, CAF has made bond placements totaling US$700 million. In 1994, CAF successfully placed bonds on the Japanese and Southeast Asian markets, better known as Samurai and Dragon markets, along with commercial paper on the US market (USCP).