US$3.5 billion offered to Colombia

With the presence of the president of Colombia, Álvaro Uribe Vélez, as witness of honor, the CAF executive president, Enrique García, and the finance minister, Roberto Junguito, today signed a joint declaration in the Casa de Nariño Presidential Palace for financing of US$3.5 billion for the 2003-2006 period.

García praised the willingness of the Colombian government to strengthen macroeconomic equilibrium and the structural reform process. In a situation of low economic growth and an unfavorable international context, it is essential to contribute to creating appropriate conditions for the recovery of productive investment and employment, he added.

The signing of the declaration closes the programming mission, during which the CAF president and other high-level officers met with the ministers of defense, finance, and transport and the National Planning Department.

On CAF activity in Colombia, García recalled that in the last four years the multilateral has backed operations totaling US$3 billion, tripling its portfolio from US$600 to US$2.23 billion. Colombia is currently the largest beneficiary of CAF loans.

The new funds announced today will be used in the public and private sectors, especially financing for programs and projects aimed at the following areas: macroeconomic stability, structural reforms and integration into international markets (US$900 million); infrastructure to support integration, competitiveness and regional logistics (US$1.8 billion), and the modernization and strengthening of the business and financial sectors (US$800 million).

CAF’s actions are also aimed at attracting funds from other sources, such as private banks and international capital markets, in the form of loans and direct investment. Priority will be given to cofinancings and other innovative financial solutions.

One third of the multinational lender's portfolio in Colombia - US$717 million - relates to funds from other financial sources which participated in operations such as syndicated loans and partial credit guarantees, under the Corporation’s umbrellas.

Special attention will be given to the Corporation's commitment to integrated support for small and medium-sized enterprises in the form of technical assistance, financing and equity strengthening, through the recently created Business Investment and Development Fund (FIDE). The CAF will also intensify its assistance to communities, microfinance, craft activities and cultural development through the Human Development Fund (FONDESHU).

Interaction with strategic programs

The financial support from the Andean lender will be supplemented by non-reimbursable technical cooperation valued at approximately US$10 million during the period, mainly for the areas of institutional strengthening, consolidation of decentralizing processes, and modernization of regulatory frameworks.

These resources will be used to interact with strategic programs that have regional impact, including the South American Regional Integration Initiative (IIRSA), the Andean Competitiveness Program (PAC), the Governance Program, the Latin American Carbon Program (PLAC), the PreAndean Program for the Prevention and Mitigation of Natural Disasters, the Biodiversity Program and the Programs for the Development of Capital Markets.

The Joint Declaration ends with a call to all social, political and economic sectors, accompanied by the international community, "to work jointly for the development of the country and to decisively help Colombia to return to adequate economic growth with political and social sustainability."