With CAF as manager: Chile grants credit for trade with Andean nations

In line with its objectives of regional integration and promotion of private economic activity, CAF became the first institution to receive Chilean funds destined to stimulate trade between its member countries and Chile, country which is also a CAF shareholder.

The Republic of Chile, through the Corporación de Fomento de la Producción (CORFO), granted CAF a US$40 million line of credit to finance imports of goods and services from that country with destination in any of the nations of the Andean Group.

CORFO is the Chilean counterpart of CAF because of its competence in aspects of financial and technology cooperation, and its specialization in development work.

The signing of this important credit agreement, in CAF headquarters in Caracas, took place in the presence of CAF President & CEO Enrique García, Chilean ambassador in Venezuela Otto Boye, and authorities from the leading Venezuelan business organizations and the Foreign Trade Institute (ICE).

This is the first time that Chile has granted a line of credit to the countries of the Andean Group to finance imports of goods and services. The facility is part of an integrated policy of promoting Chilean exports and closer relations among the partners of the Corporation.

Depending on the amounts of each operation, CAF will grant the funds under this line to Andean businesses directly or through financial institutions in the five member countries which maintain relations with CAF. The funds will be used for imports of goods and services of wholly Chilean origin or which have a percentage of Andean raw materials or inputs, for capital goods, and for financing projects under turnkey contracts. The companies established in Chile may have totally national or mixed capital, which significantly expands the opportunities for regional trade.

CAF - financial institution formed by the five countries of the Andean Group - provides trade, investment and development banking services. Together with Mexico and Trinidad and Tobago, Chile has been a CAF shareholder since 1992, when it subscribed to series "C" shares which are reserved for extraregional countries; Brazil will become a shareholder in the near future.

As a founder member, Chile signed the CAF Establishing Agreement on February 8, 1968 when the president of the country was Eduardo Frei, father of the current Chilean president, who played an important part in the subregional integration process in the late 1970s. Chile participated as full shareholder of the Corporation until 1977, when it withdrew from the Andean Group.

Through CAF, the Chilean business sector will be able to access the Andean market more easily. In this respect, the Corporation is making contacts with the private sector of its member countries to promote closer relations with its extraregional partners.