US$8.6 million loan for Costa Rican hydroelectricity

(Caracas, December 2, 1994).-- Next December 5, CAF President & CEO Enrique García, and the president of the Compañía Nacional de Fuerza y Luz SA, Pablo Cob Saborio, will sign in San Jose, Costa Rica, an agreement for a US$8.6 million line of credit to finance imports of goods and services of Andean origin for construction of the Daniel Gutiérrez Hydroelectric Plant.

The Corporation, as channel of communication with the rest of Latin America, has for the first time approved a selective economic cooperation grant for Central America in line with its objectives of strengthening integration between its member countries and other Latin American nations.

In view of the growing importance of economic integration between the Latin American economic blocks, the CAF president will use the opportunity to invite the government of Costa Rica to participate in CAF capital with a view to developing closer ties between Central America and the Andean Group.

The loan, which has an eight-year term with two years of grace, will permit Compañía Nacional de Fuerza y Luz SA, based in San Jose, to complete construction – on a turnkey basis -- of the Daniel Gutiérrez Hydroelectric Plant located in Alajuela province, San Ramón Canton. The project is 70% finished and when completed will have a basic capacity of 14 MW and an expanded one of 21 MW in total.

The funds granted by CAF will be used to finance acquisition of products and services of Colombian origin. The works will be executed by a consortium formed by the companies: Industria Metalmecánica Pescarmona SA (Impsa) of Argentina, Impsa of Colombia, and the firm Conconcreto also of Colombia.

The facility will also finance the FOB value of goods and services originating from any CAF member countries. The Costa Rican Electricity Institute (ICE), autonomous institution of the government of the Republic of Costa Rica, acts as guarantor for the borrower.