Operations totaling $637 million approved for Colombia in 2003

(Caracas, December 10, 2003).- CAF approvals for Colombia rose to $637 million in 2003, the executive president of this multilateral financial institution, Enrique García, told a press conference today in his report on the year’s activities. A record amount of $3.3 billion in operations was approved for all shareholder countries.

García said that the operations approved for Colombia include $300 million channeled to the government sector to contribute to the effort to rationalize the use of the resources by the State administration, and provide funds for public investment.

On reform of the State, García said that the actions to modernize the public administration had resulted in the merger of ministries, restructuring or elimination of unnecessary agencies and offices, and elimination of vacant posts, among other decisions, making substantial savings in the central government budget.

Similar progress was made on transverse reforms, especially in the formulation of policies of State contracting, productive management of State-owned assets, evaluation of the results of the public administration, state employment, rationalization of procedures in the administration, and a strategy for the legal defense of the nation.

In the public investment component, assistance was provided for infrastructure projects with high social benefits, such as the subsidies for low-cost housing in urban and rural areas. Cofinancing with multilateral organizations contributed to the introduction of the New School System, whose main objective is to improve the efficiency of allocation of resources to provide higher quality education.

In the health area, CAF funds were used in the Public Health Prevention, Control and Supervision project and the Expanded Immunization Program conceived to eliminate, eradicate and control immuno-preventable diseases. In the transport sector, the funds were used in projects executed by the National Road Institute and the mass transport systems in the cities of Bogotá and Cali.

As part of assistance for small- and medium-sized enterprises through the State Development Bank, a credit facility was approved for the Colombian Foreign Trade Bank which gives access to funds for an equivalent of $50 million. The operation is the Corporation’s first local-currency issue in the region. The placement will strengthen the capital market, creating an opportunity for domestic savings to be channeled into a strategic sector for national competitiveness.

In the private sector, financing requirements for working capital and investment plans were met by companies’ own resources and catalytic operations totaling $296 million. This amount covered renewals and credit line approvals for $146 million for 12 Colombian financial institutions, including a $5-million equity investment in the securitization area.

Credit operations were approved to assist the Colombian corporate sector, especially the $150-million loan for Bavaria SA under the A/B modality. This operation funded purchase of fixed assets and other operating assets in the business group’s strategy of regional consolidation in Panama, Colombia, Ecuador and Peru.

The Corporation’s important presence in the microfinance sector continued. $2.5 million was channeled into seven microfinance institutions and cooperation with the public sector, in coordination with the Ministry of Finance and the Office of the Vice Minister of Industry, which are responsible for issuing the microfinance regulations.

Using technical cooperation funds for $1.5 million, cofinancing activities began on the design of the Public Administration Reform Program (PRAP).

In the governance area, the Institutional Strengthening and Training in Decentralization and Citizen Participation Program successfully trained leaders and support groups at national level and promoted the strengthening of various public institutions.

CAF and the Vice Presidency of the Republic took actions to strengthen democratic governance based on ethics and transparency, institutional strengthening, decentralization and citizen participation, and leadership for the transformation, in various sectors of the national and regional governments. The funds were also used to prepare the National Governance Survey.

In the competitiveness area, CAF´s actions led to the start of projects to benefit three clusters: electric equipment and machinery and professional electronics in an effort to raise their export capacity; fruit and vegetables in Valle del Cauca to improve the region’s production capacity; and road cargo transport to reduce informality and improve safety in the sector.

In relation to entrepreneurial training, the third group graduated from the Virtual Course on Creation of Technology-Based Companies, and a start was made on the second stage of the Andean Export Technology and Technology Services Program began. Other activities promoted productivity and international Technology Foresight events in Colombia.

Fondeshu funds were used to finance projects in areas such as crafts, marketing, improvement of the living standards of low-income populations and microfinance institutions.

In 2003 the CAF backed high-impact projects for the organizational and social strengthening of women producers and marketers of medicinal plants; organizational strengthening of the rural crafts sector with a view to exporting; strengthening of the business capacities of communities; and creation of self-management models, all with the objective of raising living standards and family income.