Announcement of Forty Million US Dollars Loan to Colombia for Industrial Development on May 27, 1971

INTERNATIONAL BANK FOR . , RECONSTRUCTlON AND DEVELOP~/iENT 1818 H STREET, N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 71/33 Subject: $40.0 million loan to Colombia May 27, 1971 for industrial development The World Bank has appro·ved a loan of $40 .'O million to assist Colombian industry by helping finance a group of development finance companies. The loan is to the Banco de la Republica for use by five private "financieras": Corporacion Financiera Colombiana, Bogota; Corporacion Financiera Nacional, Medellin; Corporacion Financiera ,de Caldas, Manizales; Corporacion Financiera d(il Valle, Cali; and Corporacion Financiera del Norte, Barranquilla. The five financieras together with the Government-owned Institute of Industrial Development (!FI), are the most important suppliers of medium and long-term finance to private industry and the financieras, themselves, are by • far the most important sources of equity finance for private industry • Three previous Bank loans, totaling $62 .5 million, were made for the development finance companies in 1966, 1968 and 1969. The funds have been largely committed and most of the financieras have a substantial number of projects awaiting financing. The new Bank loan will help eliminate the back- log and assure the .availability o.f this type of financing for the next one to two years. The Bank loan :will cover direct foreign exc..1-iange expend! tures for projects to which the development finance companies commit funds. Of the $40.0 million, $20.0 million will be shared equally by the five companies. The balance will be available for joint operations, of three or more financieras and to those among them that have committed their fixed allocatton. The loan will be guaranteed by the Government of Colombia. Interest will be at the rate of 7~. Repayments to the World Bank will conform approximately J to repayments received by the financieras on their Bank-financed sub-loans which are repayable over periods of up to 15 years. • - 0 -