Announcement of Eight Million US Dollars Loan for Pre-Investment Studies in Colombia on March 7, 1974

• 1818 H STREET, N.W., WASHINGTON D. C. 20433 Bank Press Release No.74/13 TELEPHONE: EXECUTIVE 3-6360 Subject: $8 million loan for preinvestment March 7, 1974 studies in Colombia The World Bank has approved a loan to the Repuhlic of Colombia for $8 million to help finance a preinvestment studies project. The loan will be passed as a grant to the Fondo Nacional de Proyectos de Desarrollo (FONADE), a Government agency whose primary objective is to finance preinvestment studies of projects which accord with the Government's investment priorities. The Colombian economy has shown impressive gains in the recent past. 'nle rate of economic growth has accelerated to more than 7% per annum, and the expansion of non-traditional exports has been remarkable. To continue a • significant rate of growth it is important for Colombia to maintain a sizeable investment program through a standby flow of well studied and prepared projects. FONADE was created to encourage this flow in an expeditious and orderly manner. In the coming years FONADE will require capital, additional to that provided by budgetary allocations and from reflows from its earlier loans i.n order to ·meet the demand for preinvestment study financing from public agencies and other entities. FONADE considers that it also will benefit from the Bank's experience in the conduct and supervision of preinvestment studies, particularly in the urban~ agricultural and social sectors, where Colombia still experiences serious problems with rural poverty, population pressures, housing deficit and unemployment. In this and other ways, Bank involvement will contribute to • strengthening FONADE as an institution. Another consideration in FONADE's request for Bank financing is to diversify further its sources of foreign consultants /more Bank P.R. No. 74/13 -- Colombia -- preinvestment studies - 2 - The loan will be used to finance part of FONADE's lending operations • for the years 1974-76. This lending program develops over time as FONADE receives requests for financing. A number of studies which are expected to be financed by FONADE and are likely to lead to projects requiring external financing by the Bank and other lenders have been defined. Among them are: studies for the national rural development programs; studies for the development plans of metropolitan areas; special studies stemming from the UNDP financed and Bank executed study of urban development in Bogota; specific rural roads; detailed engineering studies for a number of roads; preparation of forestry projects; the Honda hydroelectric project on the Magdalena river; the hydro- • electric utilization of the rivers La Miel, Guarino, Manso and Moro; specific urban water and sewerage systems; and underground water studies, etc. The loan will have a term of 20 years, including five years of grace, with interest at 7~% per annum. - 0 - •