US$100-million loan for Ecuadorian economic program

The Andean Development Corporation (CAF) and the Republic of Ecuador today signed an agreement for a US$100-million loan to finance the Economic Adjustment Program which the government is putting through in the country. The loan is for ten yeas with two years of grace.

The agreement was signed by CAF Executive President Enrique García and the Ecuadorian Ambassador in Caracas Paulina García Donoso de Larrea, representing Economy and Finance Minister Mauricio Pozo, in a ceremony in the Corporation´s Caracas headquarters.

García said that with the loan operation, the CAF was contributing to the efforts of the new Ecuadorian administration to cover funding requirements and strengthen public finances with a view to consolidating the dollarization process, at the same time as using funds to address social needs.

The Economic Adjustment Program defines three major fronts for action: fiscal strengthening, structural reforms and social compensation measures. These actions are taken in the framework of the fight against corruption, poverty reduction, promotion of competitiveness and productivity, and improving internal security. Along with the CAF, the program is backed by the International Monetary Fund and other multilateral organizations.

The operation is linked to the agenda for reforms in key areas which the CAF is implementing through technical cooperation programs, the Andean Competitiveness Program and the Governance Program, among others, as well as aspects linked to the local financial sector.

The multilateral lender maintains excellent relations with Ecuador as evidenced by the increase in the portfolio to US$1.21 billion, which represents 18% of the total portfolio managed and administered by the Corporation.