US$200 million loan approved for Colombia

A long-term loan for US$200 million was recently approved for the Republic of Colombia to partially finance the Public Investment Multi-Sector Program, designed to develop important infrastructure projects in the transport, agriculture, social and environmental sectors.

This loan, whose executing agency is the Ministry of Finance and Public Credit, will cover a period of the Program – as part of the “The Leap Forward” (El Salto Social) National Plan – whose objectives are to increase economic growth and promote the productivity and competitiveness of the economy in order to respond successfully to the demands of the international market.

In the transport sector, the Multi-Sector Program will finance projects for maintenance, construction and paving of highways, as well as public participation in concessions and creation of a road cofinancing fund; while in the agricultural sector the plans are to improve infrastructure for agricultural marketing and develop the organization of campesino producers.

In the social area, the objectives are execution of a range of projects for the areas of culture, health, recreation, sports, education, participation of civil society, institutional strengthening of territorial entities, disaster prevention and human rights, especially support for displaced populations and victims of violence, indigenous peoples and Afro-Colombian communities.

Finally, in relation to the environmental variable, the Program will assign funds to improve management of strategic ecosystems for the economic and social development of the country, notably supply of drinking water and energy. Other areas include strengthening of national natural park systems and conservation and sustainable use of biodiversity.

CAF President & CEO Enrique García said the loan was part of the Corporation's policy of supporting its shareholder countries with provision of adequate physical infrastructure in an effort to create an environment propitious for production and trade, based on the competitive advantages demanded by the globalization process.

"This is perfectly coherent with the concept of sustainability which CAF applies – García said – in the sense that better protection and correct use of natural resources, combined with greater social equity and financial balance, improve efficiency and return on assets in projects and stimulate the sustainable development of the country."

CAF is an institution whose mission is to support the sustainable development of its shareholder countries and regional integration. It is formed by the five nations of the Andean Community: Bolivia, Colombia, Ecuador, Peru and Venezuela, together with Brazil, Chile, Jamaica, Mexico, Panama, Paraguay and Trinidad and Tobago.

Support for industrial competitiveness CAF also approved a non-reimbursable technical cooperation operation for US$100,000 for the Republic of Colombia, for phase II of the Sectoral Competitiveness Agreements Project, whose executing agency is the Ministry of Economic Development.

This project is a new contribution to the industrial development of this country with the objective of contributing to the sustained growth of national manufacturing chains, incorporating productivity and competitiveness as fundamental elements of the productive process. It also planned to integrate capital and labor into the process of internationalizing the economy, along with industrial reconversion and technological innovation.

In 1996 CAF made an identical contribution to the first phase of the project for US$100,000, when sectoral agreements were established with the productive chains of pulp, paper, printing, forestry, timber, dairy products, cereals for human consumption, textile-clothing, wood agglomerate and furniture.

In this second phase, the objective is to develop specific sectoral agreements with the productive chains of petrochemicals, oilseeds and concentrated animal feed, among others.

Once established, these agreements are expected to have a positive impact on the development of small- and medium-sized industries by improving productivity and competitiveness, generating employment, and enabling them to successfully meet the challenge of participating on international markets.