US$804 million for Ecuador

CAF approvals to date total US$4.60 billion.

Enrique García, president & CEO, held a press conference to report on the activities of the multilateral organization in 2005.

In Ecuador the highest percentage of approvals was concentrated on support for economic infrastructure.

A report on activities in 2005 was offered at a press conference in Caracas by CAF President & CEO Enrique García, who announced that this year the Corporation had achieved a record US$4.60 billion in approvals, including total approvals of US$804 million for Ecuador.

Support for Ecuadorian physical integration

García said that the US$559 million had been assigned to Ecuador for sovereign-risk operations, including development of infrastructure related to the transport and roads sector, and improvement of the energy service in various localities, as a contribution to the country’s productivity and competitiveness.

Funds of US$245 million were also granted in favor of private investment initiatives for corporate projects, microfinance institutions and lines of credit to banks, which channel the funds to small and medium-sized enterprises.

"Of total approvals, 44% were assigned to the economic infrastructure area, through approval of major maintenance works for road, transport and energy infrastructure," García said. "The road and transport sector received US$107 million with the objective of improving the coverage of the service and optimizing connections between the urban transport systems of various cities, resulting in important savings in costs and transport times, and improving their efficiency, with the social and economic benefits that this implies," he added.

An additional US$250 million was approved to finance the energy sector with the objective of the physical and financial recovery of the electricity distribution utilities in the country through the execution of optimization projects.

In the social development area, CAF contributed US$202 million, equivalent to 25% of total approvals, for leverage of the initiatives in the development of the Ecuadorian social agenda and achievement of the objectives established in the framework of compliance with the Millennium Goals. A large part of the funds were used to expand coverage, improve quality and achieve sustainability in the provision of potable water and sanitation services in various localities. Operations were also approved to improve the quality of the public education service.

In the area of competitiveness, productive sectors and MSMEs, US$159 million were approved to finance projects of investment, working capital and business lines, especially corporate loans for business groups, along with the assignment of funds to the regulated microfinance institutions.

Additionally, in the area of financial systems and capital markets, US$85 million was approved in lines of credit to finance operations through the member institutions of the system, with preference for the SME sector.

Contributions to sustainable development

The CAF chief executive said that approximately US$2 million was approved, through the Technical Assistance, Human Development and Special Funds for Ecuador, in 2005 for non-reimbursable cooperation operations, focused on the areas of competitiveness, governance and social and community development.

In the area of governance, especially important was the holding of the Regional Meeting of Attorneys General on the Modern State: Integration and Legal Certainty; the IV Meeting of the Governance and Political Management Program jointly with the Catholic Universities of Ecuador and Guayaquil, and the continuation of the Efficient and Transparent Municipalities Program (MuNet).

The Competitiveness Support Program (PAC) initiated projects to strengthen three clusters. The footwear and leather goods cluster in Azuay province, aimed at strengthening the productive and commercial capacities of the SMEs in this sector to improve access to international markets. The projects to improve productivity, competitive referencing and strengthening of associative schemes in the chassis-metalworking sectors of Tungurahua province and wood sector of Pichincha province have the objective of developing a culture of productivity and building capacities in individual enterprises.

In the Cultural and Community Development area, support continued for initiatives to strengthen capacities, social capital and responsibility. An important aspect was the continuation of the orchestral and choral music program, with Fe y Alegria in the choral training of children and teachers in the Solanda district. The second phase of sports training, with Banco Solidario, expanded the action to six schools of this type around the country.

In the productive and public services management effort, the important activities were the second phase of the Randipak project, with the Ecuadorian Canadian Fund and FUNDAMYF; the alliances with REPSOL YPF Ecuador in the cofinancing of three projects: with the Casa Campesina of Cayambe, the Ecuadorian Populorum Progressio Fund in Pedro Carbo Canton, and Corporación de Viviendas del Hogar de Cristo, which promote microentreprise, community organization and access to credit for poor families from localities around the country. Also in community tourism, support continued for a project with the ESQUEL Foundation to generate alternative income and employment for mainly indigenous localities in line with the Ecuadorian National Tourism Plan.

Lastly, García said that Ecuador had always been able to count on the Corporation, especially in times of crisis. This permanent and unconditional support was evidenced in recent years when Ecuador experienced the worst economic crisis in its history. The figures show that during the last five-year period (2001-2005), CAF approved operations for a global amount of US$2.34 billion for the country.