US$22 million loan granted to Venezuela

(Caracas, May 18, 1995).- A US$22 million loan was granted to the Republic of Venezuela to finance the Lake Maracaibo Integrated Cleanup Project, executed by the Ministry of Environment and Renewable Natural Resources (MARNR).

The signing was attended by ministers of Finance and Environment, Luis Raúl Matos Azocar and Roberto Pérez Lacuna, respectively, and CAF President & CEO Enrique García, who said the operation was the first granted by the institution whose funds would be used entirely for environmental development.

The loan, he added, is part of the CAF policy of supporting member countries’ efforts to achieve sustainable development, which involves not only economic aspects but also social and environmental.

CAF – financial institution formed by Bolivia, Colombia, Ecuador, Peru and Venezuela, and soon to complete 25 years of activities - provides trade, investment and development banking services. With assets over US$2.25 billion, the Corporation’s shareholders also include Mexico, Chile, and Trinidad and Tobago and 22 private banks from the Andean region.

The funds from this loan will be used by the Ministry to decontaminate Maracaibo Lake by eliminating sewage discharges from surrounding localities, which currently discharge directly into the lake. The main works of the cleanup project are construction of four treatment plants in the areas of Maracaibo, Cabimas and Ciudad Ojeda, and complementary installation of a set of collectors and interceptors to connect the sewage network to the treatment sites.

For the last 16 years, the Environment Ministry has been carrying out studies and research on pollution from direct discharge into the lake, including the study on "Conservation of Maracaibo Lake, Technological Diagnosis and Master Plan." In 1981, as part of the actions to implement the study, the Institute for Control and Conservation of the Maracaibo Lake Basin (ICLAM) was created by law. The institute, jointly with the Ministry, has been implementing some of the activities proposed in the Master Plan. The project financed by CAF covers the first stage of execution (1993-1998) of the plan, with a planning horizon to 2005.

With respect to the environment, through its operations, CAF promotes Andean business eco-efficiency, transfer of healthy and safe technology, and the possibility of achieving a positioning in environmentally restricted international markets. It is also studying new financial mechanisms for industrial environmental reconversion, supplementary to the existing guides for environmental analysis of projects.

In 1994, CAF approved operations in favor of its five member countries for a total US$2.16 billion, of which US$248 million was for Venezuela. So far this year, the Corporation has approved operations for the country for a total US$150 million, shared between the Ministry of Transport and Communications, the utility Electrificación del Caroní (Edelca), and the private sector company Corimón SACA.