US$500 million loan agreement signed for Venezuelan electricity sector

(Caracas July 9, 2010).- CAF President & CEO Enrique García, the Venezuelan Minister of Popular Power for Electricity, Alí Rodríguez Araque, and the head of the National Public Credit Office, Beatriz Bolívar, today signed in CAF headquarters an agreement which grants the Bolivarian Republic of Venezuela a US$500 million loan to finance the Program to Strengthen the National Electricity System.

The program covers execution of priority projects under the National Electric Sector Development Program which the Venezuelan Government is implementing with the objective of incorporating 16,195 megawatts of generating capacity into the system by 2015. Specifically, the finance covers execution of energy projects to guarantee continuity of power supplies in the short term, with a long-term strategy.

After the signing, García said, "in the last five years CAF has approved over US$3 billion in favor of the Bolivarian Republic of Venezuela.” "The Venezuelan government has been executing public infrastructure projects for electricity supply as part of the National Electricity Sector Development Program. The loan signed today backs these efforts."

Electricity Minister Rodriguez Araque said the finance was part of the project which the national government is implementing to improve and upgrade the generating and transmission capacity of the electricity sector. He thanked CAF for the speed with which the loan had been approved, which guarantees the viability of the project.

The approvals for Venezuela by the Latin American financial institution during the last five years have been 96% for the economic, social and environmental infrastructure, while the rest were for micro-, small- and medium-sized enterprises, and non-reimbursable funds in the areas of governance, environment, competitiveness, social capital, culture and sports, among others.

Specifically in 2009, US$626 million was approved whose main component was a loan to the national electricity sector for the Termozulia III project. In addition, in 2010 approvals for approximately US$1.8 billion are planned for projects in the electricity sector (77%), mass transit (6%), water (4%) and social action (13%).