Two loans granted to Venezuela totaling US$70 million.

(Caracas, October 22, 1998).– Two loans, for US$70 million in total, were today granted to the Republic of Venezuela for the modernization program of the Caracas Water Works and the second phase of the works executed in the Yacambú Reservoir in Quibor, Lara state.

The agreement was signed by Minister of Finance Maritza Izaguirre; Minister of Environment and Renewable Natural Resources Rafael Martínez; Hidrocapital President José María Viana; President of the Yacambú-Quibor Water System, Miguel Nucete; and CAF President & CEO Enrique García.

Emphasizing the importance of these two credit operations, García said they were both related to the CAF objectives of supporting infrastructure development in its shareholder countries, raising the standard of living of the population, and using natural resources with eco-efficiency.

He added that one of the loans – for US$50 million at ten years – would be used to partially finance the Rehabilitation and Institutional Development Program of the Caracas Metropolitan Water Works. This is the second loan granted for this project (the first for US$25 million was approved in 1996).

The program will improve the quality and operating capacity of the drinking water supply of the city of Caracas – including low-income areas – and implement marketing plans for the service. The funds will be channeled through the Ministry, and the executing agency is the company Hidrológica de la Región Capital (Hidrocapital).

Four subprojects have been defined for application of the program: rehabilitation of the Tuy II capture system; formalization of the service in unplanned urban areas; rehabilitation of networks to eliminate leaks and improve piping capacity, and installation of 100,000 micrometers in the 1998-2001 period to rationalize water consumption.

The second loan – for US$20 million – granted today is for the Yacambú-Quibor Water System Project, whose basic objective is to use the waters of the Yacambú River for the agricultural development of the Valley of Quibor, and supply water to the city of Barquisimeto and other nearby population centers.

The CAF funds will support financially the second phase of the program of works for water regulation and transfer, irrigation system, conveyance, treatment plant and dam in Quibor. In 1997 the Corporation granted a loan for US$21.5 million for the first phase of the program.

The executing agency of the project is Sistema Hidráulico Yacambú-Quibor CA, attached to the Ministry. Part of the CAF funds will finance two components aimed at improving the environmental and social conditions of the area of influence: Conservation of the Yacambú River Basin and Agricultural Development of Valley of Quibor.