The CAF grants loan for US$100 million to Bogotá City Government

García said the works to be financed with the loan would have a great social impact. In addition to the building of major new sections of the Transmilenio mass transport system, the resources will be used to improve the school infrastructure in marginal areas and to expand the city's library network.

The transport project will reduce traffic congestion and increase the average traffic speed, producing a considerable reduction in toxic emissions from vehicles. This aspect makes the project eligible for evaluation under the Clean Development Mechanism of the Kyoto Protocol, which could lead to the sale of carbon certificates.

The loan is the Mockus administration’s first with multilateral banks. The city’s secretary of finance, Israel Fainboim, praised the speed with which the CAF processed the loan.

The loan, contracted at ten years with a three-year grace period, is repayable in 14 semi-annual installments with interest at the six-month Libor rate plus 3.1% payable in arrears. The first two drawings will be made this month; the first is for US$34.5 million while the amount of the second is currently being approved by the CAF. Further drawings will be made in 2002 and 2003.