Papeles Venezolanos CA receives syndicated loan

A syndicated loan for US$40 million was today granted to the company Papeles Venezolanos CA (PAVECA), one of the most competitive industries in the country in the production and marketing of consumer products derived from tissue paper for local and export markets.

The loan – with a seven-year term – will be used to finance a de-inking plant which will generate pulp from recycled material replacing part of the softwood pulp currently imported, resulting in a substantial reduction of production costs, especially in its toilet paper line.

CAF Vice President & Deputy CEO Luis Enrique Berrizbeitia – who signed this operation jointly with PAVECA President José León – said the project also incorporated elements of industrial eco-efficiency and environmental and social benefits, based on reutilization of paper which decreases pollution, deforestation and import of chemical pulp. "Recycling also creates employment and contributes to saving foreign currency for the country, all factors which are part of sustainable development, fundamental pillar of the CAF mission," he added.

This credit operation is the first to be structured for Venezuela using the innovative financial facility known as A/B loans, based on agreements which the Corporation maintains with the central banks of Germany, Belgium, Spain, Holland and France. These agreements facilitate the participation of the international commercial banks of these countries. In this case, the participating financial institution is ABN Amro bank of Holland.

CAF – formed by 11 countries of Latin America and the Caribbean – is playing an important catalytic role by attracting third-party funds and channeling them into the public and private sectors of its shareholder countries. This is possible thanks to cofinancing operations with financial institutions in industrialized countries and multilateral organizations, or through issues on international capital markets where, because of its prestigious position, the Corporation has generated to date US$1.636 billion and will soon make a new placement on the euro market.

A/B loans – which CAF began to develop this year – are instruments recognized by the world's leading financial institutions and risk rating agencies. With them, CAF has expanded its offer of financial products to the private sector, and attracted investments from other financial institutions interested in channeling their contributions to CAF.