US$1.14 billion for Colombia

CAF approvals to date total US$4.60 billion.

Enrique García, president & CEO, held a press conference to report on the activities of the multilateral organization in 2005.

In Colombia the highest percentage of approvals was concentrated in support for macroeconomic stability and structural reforms.

A report on activities in 2005 was offered at a press conference in Caracas by CAF President & CEO Enrique García, who announced that this year the Corporation had achieved a record US$4.60 billion in approvals, including US$1.14 billion for Colombia.

Support for Colombian productivity and competitiveness.

Garcia said that US$783 million was assigned for sovereign risk operations especially development of infrastructure related to the transport, road and energy sectors. In coordination with the country’s productivity and competitiveness efforts, priority attention was given to major reforms in the nation’s trade and logistics. Additionally US$350 million was assigned for private investment initiatives for petrochemicals, financial systems, non-traditional export products and energy.

"Of the total approvals, 18% were assigned to the strategic area of economic infrastructure for financing major works of conservation and construction in the country's road and energy infrastructure. US$150 million was approved for the road sector to upgrade the infrastructure of the national road system with a view to improving the physical integration of the country and the sustainability of the national highway system," Garcia said. "For the energy sector, US$50 million was approved to finance new high-voltage power transmission lines (500 kv) to increase the capacity of the National Interconnected System."

In the social development sector, CAF contributed US$83 million for leverage of government initiatives to enhance the quality of life of Colombian citizens, especially improving equity and access to public goods such as health, education and potable water. In this respect the Republic of Colombia received specific backing from this institution to raise the quality and coverage of the vaccination system, and improve the educational system, aspects that will lead to higher levels of productivity of human capital.

For macroeconomic stability and structural reforms, loans and guarantees were approved to back the government’s economic growth strategy. US$700 million was destined to strengthen competitive participation on international markets, and rationalization of the tax burden, product of the new round of pension reform and public debt management.

In the specific case of support for Colombian international competitive participation, CAF supported the identification and development of the sectors that require changes, with a view to strengthening the competitive profile and the benefits of international participation. For the Colombian pension system, CAF destined funds to support the new round of reforms instrumented by the Legislative Act of July 2005, which strengthens the mechanisms to relieve fiscal pressure at the same time as improving equity in the coverage of the system.

With respect to the competitiveness, productive and MSME sectors, funds were approved for various agents in the Colombian private sector, as evidenced by loans totaling US$150 million to finance investment, working capital and business lines. In relation to the first two items, US$15 million in corporate loans was granted to companies in different sectors to back investments in capital goods and expand production capacity. Also US$135 million was used to support MSMEs through the financial system.

Contributions to Colombian sustainable development

The CAF president reported that approximately US$4 million in non-reimbursable technical cooperation funds in 2005 were approved for Colombia. These operations focused on he areas of competitiveness, governance, integration and cultural and community development.

For governance, the projects were oriented to promotion of transparency and efficiency in public management, and improvement of financial administration in municipalities. During this period, the Governance and Political Management Program continued jointly with several universities, together with the Leaders for the Transformation Program with the Advanced School of Public Administration (ESAP), and the Programs to Strengthen Territorial Bodies, under the Ministry of Finance and the National Planning Office.

The Competitive Support Program (PAC) directed its efforts to completion of two strategic projects: Business Modernization of Land Cargo Vehicles In Colombia, in which over 100 companies, organizations, production associations and official bodies took part; and Exporte.org which promoted the potential and scientific offering of 24 Colombian technology companies in the markets of Chile, Ecuador and Peru.

The PAC also began three new projects: Improvement of the logistics chain of the palm oil cluster and its inputs in Colombia; Cosmetics and toiletries cluster, to strengthen the productive and commercial capacities of the chain; and the Cluster of petrochemical, plastics, rubber, paint, dies and synthetic fiber products, which aims to strengthen the chain’s logistics and information systems. Also, a series of forums were held on issues of productivity and associativity during the year.

Garcia said that CAF continued its cultural and community development projects aimed at generating and strengthening capacities and promoting social responsibility and capital. The music program in its orchestral, choral and flute sections also continued. In Medellin, an alliance of the public, private and tertiary sectors initiated the Cultural School project for the making of musical instruments. Programs of sports training and generation of values were organized for excluded communities in various regions in alliance primarily with the local private and public sectors. A new phase of the project to strengthen productive and marketing processes with cacao families in Valle de Cauca began. Significant progress in productive community management was made in both phases, in association with local governments, producers, merchants and international actors. Lastly, Garcia said that the dynamism of the institution’s presence was evidenced by the figures for the last five-year period (2001 --2005), when CAF approved operations for Colombia for a global amount of US$4.25 billion.