US$475 million approved for Ecuador

(Caracas, July 28, 2006).- The Andean Development Corporation (CAF) approved US$475 million for two operations in Ecuador: a Contingent Line of Credit for US$275 million, and US$200 for the Second Social Investment Assurance Program (PRAISE II), both to be executed by the Ecuadorian Ministry of Economy and Finance.

On the Contingent Line of Credit, CAF President & CEO Enrique García said that, "the Ecuadorian government has accepted the important challenge of implementing an agenda of specific actions on two fronts: public debt management, and improvement of the quality of expenditure on public investment projects."

"The line of credit will help achieve the objectives of the Ecuadorian government by guaranteeing contingent resources for the financing of operations in the framework of the management of public liabilities, aimed at improving the debt profile and mitigating its risks," García said. "The operation is also part of the agenda agreed between the nation and CAF to promote better use of resources and improve the efficiency of expenditure."

Social Investment in Ecuador The objective of the second operation approved for Ecuador for US$200 million is to protect the social investment of the Ecuadorian state in 2006 and 2007, specifically in the health and education sectors. All these actions give priority to the less privileged sectors of society as part of the 2006 Social Development Agenda which the Ecuadorian government is implementing in the context of the Millennium Goals.

The operation has been conceived as a catalyst and guarantor of financial flows for the two priority programs: first, protection of the execution and expansion of the Universal Health Assurance Program (AUS) for US$130 million; and second, guarantee the expansion - with quality and equity - of the coverage expected in 2006 and 2007 of the Program for the Universalization of First Grade Basic Education Program (UEB) for a maximum of US$70 million.

The Ecuadorian development process can count on CAF In response to Ecuador’s needs with respect to its development process during the 2001-2005 period, CAF approved operations for US$2.36 billion for the public and private sectors.

With the constant credit support given to Ecuador, CAF provided 88% of the total approvals from multilateral banks last year, which positions the organization as leading provider of multilateral finance to the Andean country.