Colombia - Development Program and Export Expansion Project

Document of RETURN TO 1 The W orld B1K REPORTS DIESK FOR OFFICIAL USE ONLY W ITHiN Report 17 R t ,urx PROGRAM PERFORMANCE AUDIT REPORT COLOMBIA: PROGRAM LOAN (LOAN 842-CO) September 23, 1977 Operations Evaluation Department This document has a restricted distribution and may be used by reciolents only in the Derformance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  FOR OFFICIAL USE ONLY PROGRAM PERFORMANCE AUDIT REPORT COLOMBIA PROGRAM LOAN (LOAN 842-Go) TABLE OF CONTENTS Preface Basic Data Sheet Highlights PROGRAM PERFORMANCE AUDIT MEMORANDUM 1 Design of the Loan 2 Export Projects Component 2- 3 Achievement of Objectives 3 Conijtinn fnr thp SarAnd Trnnrhp 4 Disbursement and Use of Counterpart Funds 5 Summary and Conclusions 5- 6 Attachment: PROGRAM COMPLETION REPORT Summary A.1 - A.3 1. Introduction A.4 III. Loan Description and Objectives A.6 - A.7 IV. Import Component A.7 - A.8 V. Export Component A.9 - A.16 V I.. Z .Lc.LiUjLLLUIL I-L %1- '.ULLL £ L CU "LeL Cance ~llau L of Second Tranche A.16 - A.17 VII. Conclusions A.17 - A.19 Annexes: I. Balance of Payments Data (100-74) 4f. LU 2. Terms of Trade (1970-73) A.21 3. Import Component - Disbursement Schedule A.22 4. Import Component - Project Share of Total Imports A.23 5. Import Component - Allocation of Counterpart Funds A.Z4 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. -2- Page No. Annexes: 0. Import Component - Allocation of Counterpart Funds Compared to Projections (Percentage Terms) A.25 7. Import Component - New York Spot Prices, Colombian Mams A.26 8. Export Component - Project Data (as of March 31, 1976) A.27 9. Export Component - Summary of Operations, no of July 2. 1976 A_9R 10. Export Component - Description of Subprojects Approvals of Foreign Exchange Subloans A.29 Approvals of Domestic Currency Subloans A.30 12. Export Component - Distribution of Approved Loans by Size (As of March 31, 1976) A.31 13. Export Component - Distribution of Approved Subloans Uy AHLeCUL LCL d[U IeiS LAS 01 LarcH i1 1710) t.JL 14. Export Component - Sub-Loan Distribution by Economic Activity and Location (As of-March 31, 1976) A.33 . VApoJ Sumpunent - GLyment eueration uy Economic Activity (As of March 31, 1976) A.34 16. Export Component - Export Commitments and Actual Exports A.35 17. Export Component - Approvals Schedule A.36 18. Export Component - Disbursement Schedule A.37 19. Export Component - Distribution of Committed Loans by Financial Intermediaries (As of March 31, 1976) A.38 20. Export Component - Characteristics of Subprojects by IntPrmPdiaria% A 10 21. Export Component - Staff of Development Credit Department A.40 PROGRAM PERFORMANCE AUDIT REPORT COLOMBIA PROGRAM LOAN (LOAN 842-CO) *n T.i, A .1 1M Loan 842-CO for US$60 million, to be disbursed in two equal tranches, was the forty-ninth loan, and the first program loan, to be approved to Colombia. The loan was signed on June 28, 1972, and became effective on August 24, 1972. The second tranche was cancelled in February 1973, and the first tranche was closed on September 30, 1976. A Program Completion Report (PCR), prepared by the Latin America and the Caribbean Regional Office,is attached. It is comprehensive and competent. The audit report supplements the PCR by focusing mainly on the design of the loan and dealing with performance under the loan in relation to its objectives. Comments on the draft audit were received from the Latin America and the Caribbean Regional Office and Policy Plan- ning and Review Department of the Bank. PROGRAM PERFORMANCE AUDIT REPORT COLOMBIA PROGRAM LOAN (LOAN 842-CO) BASIC DATA SHEET Amounts (in US$ mln) Aq nf R/11/77 Original Disbursed Cancelled Repaid Outstanding Loan 842-CO 60.0 29.55 30.45 - 29.55 Project Data Original Plan Actual or Est. Actual Conception in Bank 9/16/71 9/16/71 Board Approval May 1972 6/22/72 Effectiveness 8/24/72 Loan Closing 12/31/74 9/30/76 Mission Data Month, No.of No. of Year Weeks Persons Manweeks Date of Report identification-- Preparation )-- 11/71 1 4 4 11/05/71 Preappraisal ) Appraisal 1/72 2 2 4 3/30/72 Subtotal 3 8 Supervision I / 6/73 1 2 2 6/22/73 Supervision II/ 1/74 1 2 2 1/11/74 Runervi-inn TTT2/ 5/74 0- 1 0.5 r/17/74 Subtotal 2.5 4.5 1/ This mission was part of the Economic Mission visiting Colombia. Date of Conception in Bank is date Bank first recorded project was being considered for financing and began to follow up that decision in a serious continuous way (Project Negotiations or Country General Files). Actual Loan Cl6sing Date is date of last disbursement out of the Loan, as given by Controler's Department. 2/ Supervision Missions also reviewed DFC loans: 451-GO, 534-GO, 625-GO, 742-CO and 903-CO. PROGRAM PERFORMANCE AUDIT REPORT COLOMBIA PROGRAM LOAN (LOAN 842-CO) HIGHLIGHTS This report deals with the program loan made to Colombia in June 1972. Its principal objectives were to assist Colombia to resume a higher rate of economic growth and to reduce the dependence of the economy on coffee exports by encouraging the Government to undertake policy measures of a longer term impact. The audit finds that the Program Loan achieved its main objectives. It helped Colombian industry to build up its export capability and to increase its non-traditional exports. The Govern- ment took measures to increase budgetary revenues. It is not, how- ever, possible to relate precisely the improvement in the performance of the economy to measures taken in connection with the loan or to distinguish the impact of the loan from that of measures taken by the Government and aeneral economic develonments. The loan was made in two tranches and, because of rising coffee prices, the second tranche was~ cancnle 1d.- Othe points o neetae - De-i-n of the loan (pras i n7 nnri o if thep PrR and paras. 5-7 of the PPAM); - Role of the export projects component (paras. 5.01-5.29 of the PCR and paarraass 10 of the P-P.,, and and paras. 18-19 of the PPAM). PROGRAM PERFORMANCE AUDIT MEMORANDUM COLOMBIA PROGRAM LOAN (LOAN 842-CO) 1. Coffee exports play a crucial role in Colombia's government revenues and foreian exchange earnings. In 1971 it was estimated that a one US cent per lb. change in the price of coffee made a US$1.5 million difference to annual Government revenue and a TMAR-4 millinn diffPrPnrP to its annual export earnings. 2. The price of coffee which was 56.4 US cents in 1970 began to the Government's budgetary position worsened, and its balance of mer- andisuL LLU shUweu a defiCiL UL U9140 milliOn. 1h Government of Colombia approached the Bank for a program loan and in June 1972 the Dan approved a Program Loan of US$60 million, to be made available in two tranches. The objectives of the loan were to help Colombia (a) resume a higher rate or economic growth- and kD) "achieve a rapidly diminishing dependence on coffee export" (para. 24, President's Report No. P-1076). 3. The following Table gives the amounts of funds made available, and their proposed uses, under each US$30 million tranche of the Program Loan: Program Loan Counterpart Funds Amount Amount (US$ million) Purpose (US$ million) Purpose 20 Import of specific 15 Development expenditure categories of goods under specified categories 5 On-lending for permanent working capital needs of exporting enterprises 10 On-lending for - exporting enterprises 30 20 Since the export component of US$10 million was intended to be used for further on-lending, no counterpart funds (except in the process of renav- ment by sub-borrowers) were to be generated and, therefore, provisions relating to counterpart funds did not apply to this segment of the Program Loan. - 2 - 4. The two tranches under the-loan had the same characteristics (use of funds, export component and other requirements). This report highlights some issues arising out of the objectives and design of the Program Loan. Design of the Loan 5. Two elements in its design distinguish Loan 842-CO from other program loans: (a) Firstly, the loan had a component for export project financing; (b) secondly, it included explicit conditions governing the release of the second tranche of the loan. 6. There were two conditions for the release of the second tranche: (i) The first was a miximum price of 57 US cents per lb. of coffee, on the ground that at a coffee price above that level Colombia would not need the foreign exchange provided under the second tranche to support its d-p1lonment nrogram. (ii) The loan also nrovided for a nerformance review six months after itbecame effective. This review was intended to deter- mnine thep prnaogres mnAde inanrVipvinv acvppd fnrQpfQ in ePonrts, in addlition- al revenues through tax measures and in current budgetary surplus. Each tranche of the loan. The targets for export growth and fiscal performance rereete -he end reutoadaou onplcmesrsn these fields intended to achieve these results (para. 7.03 of the PCR). Their relevance la n te fc l + 1 A,e t- --^-A-A +-I,- I- F^ further discussions on policy measures, had coffee prices remained below %LULY _ -VC ,.CtL o 1L.. - .U CtLLLLU L_. normal, quick-disbursing characteristics of program lending, the export F-JJ k 'LLLLVIL UO9 . L- Lit -iJ &L .Lt S. ttV I JLaniJajOiiL ant. LLC LtJLULLCL PaL funds equivalent to US$5 million for permanent working capital loans, had Lthe c11hLCLrisLc U a Ur LUaL. IL1e1D dLarLcLListic iUceU Lte pace of disbursement under the loan: The first part, US$20 million, was disbursed by January 12, 17/3, that is, within 5 months of the date of effectiveness; disbursement of the remaining funds under the first tranche, however, was completed only in the third quarter of 1976, the closing date for the loan having been extended by 21 months (from December 31, 1974 to September 30, 1976). Exports Projects Component 8. The export projects component, whose main objective was to improve the export capacity of industrial enterprises in Colombia, did not have the normal DFC loan objectives such as institution-building or develop- ment of the capital market. It also differed from DFC lending in Colombia in its design in that (i) it used a different channel (the two funds - Fondo de Inversiones Privadas (FIP) and Fondo Financiero Industrial (FFI) - rather than be administered directly by the Department of Development Credit (DDC) of the Banco de la Republica - BR, (ii) in addition to the private financieras, commercial banks were eligible for on-lending, and (iii) instead of a free limit. it provided for a ceiling (set at US$1 million) for sub-loans, with no provision for review of sub-projects by the Bank. 9. Given the limited objectives of the export projects component, the deJ*6n.pOUd effiCient in. achi eving them. The choice o f 'VTP" and FFI enabled the Bank to operate through existing agencies, thereby reducing Lhe Leau time neeueu LU UL Ltn :Uu Lo use. LuLe use u utuLLLeCL%LaJ. bansE for on-lending helped to broaden the clientele and the geographical dis- tribution or the runOs. 10. It appears that, overall, the export condition - export earnings over five years to exceed all direct foreign exchange costs of a sub- project - set for on-lending under the export component, will be met: against minimum export requirements of US$296 million, actual exports by December 31, 1975 (about the third year of operation), amounted to US$240 million, and likely exports over 5 years are estimated at US$400 million. These figures, however, need to be interpreted with caution: (i) the exports related to the companies which obtained the sub-loans and not to the sub-projects for which the sub-loans were made; and (ii) while the over-all export target was likely to be reached, 15 of the 22 sub-borrowers were lagging in meeting their individual export commitments, their exports by December 31, 1975 being only about one-fifth of expectations. Since prices also rose substantially after 1973, the significance of the perfor- mance lies more in increasing export consciousness in industry and in building up export capability and export markets than in the actual amounts of export achieved during the period under review. Achievement of Objectives 11. Two main objectives of the Program Loan were to assist the country to resume a high rate of economic growth and to reduce its depen- dence on coffee exports. Colombia's current account balance remained adverse in 1972 and 1973, and the Program Loan was of substantial help in filling the gap, as the increase in the inflow of public capital from US$130 million in 1971 to US$255 million in 1972 and US$285 million in 1973 (Annex 1 of the PCR) shows. Thus small as it was in relation to Colombia's needs, the loan helped the Colombian Government in its efforts to bring in other resources to meet the country's external gap. 12~ - Grs domesti product which had grown at the rate of- .9 during 1970-73, increased by only 5.9% in 1974. Gross fixed investment more sharply in the subsequent two years; at constant 1970 prices, gross fixed iLVcotm1ent was av L n LLE .LsLtablL nLthMUU fiu rn pewru a uu-ain rise in 1973 and 1974. 13. Minor exports (that is, exports other than coffee and petroleum and ue UE4.a LV / Licreased s'U,>Lt-LLIL-L"LLy fe dL L 7/ . I J"_UL;UIII_ALL for te first time higher than the value of coffee exports in each of the years ± /Z LU . uverall, the export projects component ana Le exput cUnCiou- ness so promoted helped achieve one of the objectives of the Program Loan, namely, to increase non-traaional exports and, thereDy, to help reduce dependence on coffee exports. Conditions for the Second Tranche 14. The Program Loan had provided that the second tranche would not be made effective if the coffee nrice exceeded 57 cents per lb. The coffee price was 53.65 cents per lb. in June 1972 when the loan was anroved. and rpched 6375 cents ner lh- in Antivt 1972 when the loan became effective. After a decline (but not to less than 57 cents per lb.) in thp Ri!hqPn1iPn mnnth of 1979 (Annrpz 7 of thp PCR- rhp nrine hegan to rise again from January 1973, and the second tranche of the loan was cancelled in Febranrr 1971 as n-rmr4Arl iindamr tho T.rnn Agreement- The cancellation was also justified in terms of immediate needs as Colombia ha a_ -avr~-able b-,. (TTZI'9A 1 -o4 1 1 4 -) 4,, 44-i, h ot -rn,Aa 4,n I171 and the deterioration in the balance to a US$16 million deficit in 1974 was due mainly to arise In -mot -oe h peiu year'- 1--1 Beie IJ.4.the coffee..t. prc, thei !oan~., aloprvde o. ar-ve of performance before the second tranche could be used. This review was 4-o 1.- 4 - - - 4- 0-F +---1..a ~ 4 t..an.. - .. 1 V 01~ - 4-, the POR re- lating to exports ("an increase in non-traditional exports of at least rJco Aurilng calendaL yeaL 197L U veL i111\ , tax revenues wcuk ceu I.) Io UU.IL ie U.L ) di L1 . UV L .L J L I- iD k~IU WLLJ-_LAL=L LCV LLt_ measures taken after 1971 would lead to a net increase in tax receipts .L aL L~ L . JL*9L U I.L.£L L-.iL LL6 Li A I . J VLi.A Ui..L6 )O "JL L .LL%U k MIi increase in the current budgetary surplus of at least 19% as compared to 1 (V A \ 16. Because of the rise in coffee prices and consequent cancellation of the second tranche, there was no reason to hold such a review. Never- theless, it is interesting to measure the performance of One Colombian economy against the conditions which were the result of an understanding between the Government and the Bank on the measures needed to improve the country's economy. The export condition was easily fulfilled. As regards the other two conditions, the Government raised customs duties in 1972 and introduced in 1974 a presumptive income tax (in place of a presumptive agricultural tax in 1973, as discussed at the time of the loan), yielding revenues in excess of Col.$l billion as required under the covenant. On the other hand, the actual increase in budgetary surplus of 7.5% in 1972 and 24.3% in 1973 (a 4.8% decline and 3.6% increase respectively, in real terms); and the decline in the ratio of current revenues to current expen- diture from 1.41:1 in 1971 to 1.39:1 in 1972 and 1973 indicate that the stipulated additional surplus of 19% in 1972 over the 1971 was not achieved. 17. It is difficult from the above to assess the improvement in the performance of the economy or to relate it to the Program Loan. Perfor- mance under the two covenants relating to fiscal measures cannot be separated from the impact of other developments on the budgetary position: it was not capable of measurement nor amenable to monitoring, particularly in an inflationary context. Given the relationship between the coffee prices and government revenues, the improvement in the fiscal situation achieved in 1973 and 1974. can be attributed not only to the comnliance with the loan covenants but also to the rising coffee price in 1973 and the general inflationary situation in that year and subqniuenty1v While therefore, the Government did take steps to raise revenues, as required under the loan, their imnact in strengthening the budgetary nosition of the Government cannot be evaluated precisely. Disbursement and Use of Counterpart Funds 18. Disbursement of the program component was rapid, and was facili- tated by a simplification of-A, -444. the prcdue .4tiA lA d- for- r-- bursement against imports (para. 4.01 of the PCR). There was close moni- toringL oL commitmentL andL disb-ULrs=eLCenL -ULnd=er th.=ejLI ~ UxprtrUJeCtSL -LpI.UIneLiI extensions in closing dates under this component being used to revise borrowers). 19. The release of counterpart funds was made conditional, among other things, upon the Government meeting the local currency requirements of public sector projects receiving Consultative Group assistance. This condition was invoked in 1973, in respect of the release of the final installment of counterpart funds, and the Bank delayed the release of the funds owing to non-fulfillment of certain obligations of a financial nature relating to Bank loans (Loans 536-CO, 634-CO, 682-CO, 738-CO, 741-CO and 860-CO) as also late contributions by the Colombian Government to AID and IDB-financed projects. Release of counterpart funds was thus used, as provided, to ensure adequate local financing of (non-Bank) Consultative Group projects (para. 4.06 of the PCR). Summary and Conclusions 20. As it was designed and implemented, the loan served a more specific purpose than an IMF drawing or a straightforward program loan, in that the export projects component of the loan helped to build up a long-term export capability. In addition, by providing a valuable element of budgetary support and by linking the formal withdrawal of accruals of counterpart funds to the financing of Consultative Group projects, the Bank assured that the slow-down in the local currency financing of such projects, was overcome. 21. Compared to other program loans, the design of Loan 842-CO was sophisticated. incorporating both a auick-disbursing element normal to program loans and an export projects component (in both the loan and a part of the counterpart funds Renerated through the quick-disbursing element) intended to improve directly the export capability of the country. There were two basic elements in the success of the export projects com- ponent: it was directed towards achieving a limited, clear-cut objective; and secondly, it was channelled throueh a broader eroun of financial inter- mediaries, particularly commercial banks, than the Bank's normal DFC loans. Rather than policy understandings. the loan laid down snecific targets to be reached in the fiscal and foreign trade fields. Finally, a two-stage commitment formula was established, which nrovided hoth for intPrmediat- monitoring of obligations and for relating the release of funds to the need for thm While like the Proornm T.nAn to 7Amhin (Lnan Q11-7AN only hAlf the amount approved under the loan was disbursed, the two-stage formula iOt have.-4f4- nnnA4t4nne fnp- 4-O 7m"Ma 1^- AiA not have. 22. The loan was used as a vehicle to encourage the introduction of various measures in the management of the Colombian economy, particularly in the field of exports and public savings. The effects of these measures, however, proved difficult to monitor in the context of an accelerating inflation rate in the economy. The design of the loan was intended to reach specific goals (reducing the balance of trade gap by increasing exports, fiscal reform). The extent to which these goals were reached varied. How- ever, the extent of achievement cannot be precisely related to the policy measures taken in connection with the loan. 23. Summing up, the loan did achieve the main objectives set under it. It helped Colombian industry not only build up its export capability but bring about increases in non-traditional exports. The Colombian Government did take measures intended to raise additional revenues. Finally, as coffee prices rose and the balance of merchandise trade improved, obviating the need for special external assistance, the second tranche of thp lnnn wa. not uqPd. Tt is understandable that the improvements in the fiscal situation and foreign trade cannot be attributed precisely to the mmesres tken in rnnnpction with the Inan- Neither is it nossible to distinguish the impact of the loan from that of other measures taken by the Govenmen and cr~ ti TInMn- in the~ Prnomy. _l__v tbp lnnn~ did give rise to a set of measures to enhance Colombia's export capability TAiih i: nf ln-t-rm hPnPfit to thp rnlnmbian pnnnmv Operations Evaluation Department - A.1 - PROGRAM COMPkETION REPORT COLOMBIA PROGRAM LUAN tUmAN O42-o O SUMMARY i. After a period of strong economic growth in the late 1960s. Colombia began to experience a downturn in 1971. A sharp drop in cottee prices resultea in a major deterioration in the balance of payments and sharply reduced public savings. During the same year, severe flooding in several parts of the country and a decline in the rate of growth of non-coffee exports further compounded the country's economic difficulties. To help ease this situation Colombia applied to the Bank for a program loan. ii. Program Loan 842-CO. for US$60 million (divided in two equal tranches) was approved by the Bank in June 1972. The second tranche was eventually canclld beause roffee orices started rising again in the later half of 1972 and exceeded the cut-off point of US$0.57 per pound by the date the second tranchen na duo to he released. Each tranche of the Loan consisted of two components. The import component of US$20 million would provide foreign exchann to fininne imnrts of raw materials. intermediate goods and capital equipment by industrial and agricultural enterprises. The export component of usin m4i4n" wna a4moe at atrainthpning Colombian non-traditional exports by helping to provide term financing for export oriented projects by private sector firs.nf theUmnn ^intarpart canrated by the sale of the import component proceeds to private firms, US$15 million equivalent was to be used Co goven-entn pu.1ic inasnment and ITSSS million to supply the working %_ 5 LUIAV V ___ _AUL_-- - - capital needs of private exporting fitam. iii. The primary objective of the loan was to assist Colombia in overcoming tS_ immadiate aconomic difEficulI tine and to rement and anvrin n high rate of economic growth. During Loan negotiations.the Colombian authorities agreed to take a number of annnmt main, n an aim a. 4nnarine exornt narfnrmanre increasing public sector revenues and maintaining public sector investment. To eno.ure rapid actnion on. theseasnoures, a serie nof targetsa we.reagreed, tile achievement of which were made conditions for the release of the second tranche. L7 4V1CC target %nj.UU ICu ncreaseCS in nL n 64=~&UXL&L1O.L exports by at least 15% in 1972 compared with 1971; (b) adopting fiscal measures after L-51J. kXnluiuig incusLeu Lax cu±AlectonU througuLl betLr u tax aumiisa ratrILN that would lead to a net increase in tax revenues of at least Col$l billion in 1973; (c) achieving an increase in current Government Oudgetary surplus of at least 19% in 1972 as compared to 1971. iv. After 1971 Colombia was successful in accelerating economic growth. GDP growth which averaged 6.6% per annum in the period x9o-±9i0, fell to 5.5% in 1971 but increased to 7.0% in 1972 and 7.2% in 1973. It is difficult to assess to what degree this improved performance was attributable to the Loan itself, and to measures adopted by the Government in 1971 and 1972 in the context of the Loan, since many other internal and external factors influenced the economy. Growth of non-traditional exports (64% in 1972 and 35% in 1973) far exceeded the Loan target of 15% and was one of the major factors contributing to improved economic performance. However, the increases in coffee prices during the latter part of 1972 and in 1973 were also important factors. - A.2 - v. The targets for increased government revenues and savings were not LUl.Ly achieved, AlthUugh 1973tJ x eA eue L_LUCH UL=M5CU DY UV.LY,LOV U.L.L.L.UL XLL 1973 compared to the target of Col$1,000 million, most of this increase can he attributed to ini'latiun, nigher cofcse prcas ano higher economic growth rather than to new tax measures or better tax administration. The Government's current budgetary surplus did not increase by the targetted 19% in 1972. In fact, the ratio of current receipts to revenues remained virtually unchanged at 1.42:1 throughout the 1972-1974 period. Failure to meet fully these targets is attributed mainly to delays in introducing new fiscal measures partly because of reluctance to adopt piecemeal changes. In 1974, the Government announced an imaginative and comprehensive fiscal reform which considerably exceeded the Bank's initial expectations under the Loan and has contributed to substantially improved fiscal performance. vi. The export component of the Loan made a comparatively small but important contribution to the longer-term growth of non-traditional exports. The export performance of the 32 subprojects financed under the loan is exceeding initial expectations by 35%. Although the second tranche of the export component was cancelled, together with the import component, when coffee prices rose, the Colombian authorities subsequently made available a similar line of credit from internal resources which enabled the special arrangements for financing export projects to continue. vii. In contrast with previous Bank DFC loans to Colombia in which five private financieras participated, all commercial banks and financieras throughour Colombia were eligible to act as intermediaries under the export component, which was administered by Banco de la Rep6blica (BR), Colombia's Central Bank. It is probable that the participation of commercial banks, which utilized 57% of the loan proceeds, helped to speed up the initial commitment of the Loan and to achieve a wider distribution of lending through their extensive branch networks. However, their participation also resulted in somewhat lower appraisal and super- vision standards than in normal DFC loans. This potential problem was recognized at the outset, and BR agreed to strenathen its engineering staff in order to carry out a more thorough review of the technical aspects of subproject appraisals submitted by intermediaries. This stren2thenine has hanefit6d subsequent DFC loans channeled through BR. viii. Overall, it appears that the Bank's main objectives in making the loan wAre lareply mtn COnnmbin offirinlQ qppm tn fP1 hn th T.nan made a seaful contribution to overcoming the economic difficulties being experienced in 1971/72. Furthermore, they consider thast the dialogue betrween the Goverm-ent and the Bantk that took place in the context of the loan was a significant factor in encouraging Loan proceeds were used for the intended purposes and generally the anticipated Xx. LL aLter UL11UU.LL LU ULUW UUy IUeOUS IrUm Lis raner unusual loan that would be generally applicable to normal Bank lending operations. However, the rollowing detailed points may De relevant to other program loans or export oriented loans: - A.3 - (a) the Apavnhility nf dAvising aimnlifiad diaurscment procedures to avoid delays in what is meant to be a fnat dihraina loan; ~&J L~~ fltSA t~ap~ C LI 0h V0U WL&JU WAA"I 6%.%,WU C9 f L XII UU be kept if the Bank wishes to review in detail the uL.Aa.aL.La A .non-stanuaru mnLa e.g. cIont m t financing; (c) when considering the criteria to be used to define e^poL SbPuOLeCtS fUr the purpU St nan rinancing, it is important to recognize that the criteria will nave to depend primarily on an adequate ex-ante appraisal of the export prospects of the subproject. Once the SUbproject has been completed it is often difficult to distinguish exports attributable to the subproject from exports attributable to the company as a whole. In addition, it is difficult to determine who was at fault, if export targets are not met, unless the export potential of the subproject was properly examined before the project was financed; (d) the fact that is often the larger companies that are in the best position to export and thus it is difficult to include employment generation or regional development objectives in a loan whose primary focus is on export promotion; (e) the practical difficulties involved in trying to assess the impact of specific economic measures that are taken by a borrower in the context of a program loan because of the multiplicity of other factors that influence the development of a national economy. - A.4 - I. INTRODUCTION 1.01 The program lonn (Loat 842-CO; the "Loan") to the Governmeot of Colombia, for US$60 million (divided into two tranches of US$30 million) was approved on June 28, 1972. It became effective on August 24, 1972, was fully committed on December 31, 1975, and closed on September 30, 1976. The Loan was made (i) to provide foreign exchange for imports of raw materials, intermediate products and capital equipment (import component); (ii) to finance, out of the peso counterparts, government public investment and permanent working canital needs of orivate industrial and agricultural exort enterprises, and (iii) to finance the foreign exchange component of projects exnected to inrrPaP nnn-traditionnl ennrts (export comnonent). The second tranche of the Loan was cancelled since coffee prices increased beyond T1An_S7 nPer nniintj i-p- t-ha r'ttnff nnin4,t fnr itaQ r1ppAqpe IT. UArtri-ATTWIV IA TAM 1DVMAT7QT 2.01 In the late 1960s and early 1970s the Colombian economy experienced a rflS.6X Ave. U L tcoun Lu . 6 u W.L#11 l &LVCl C LMC. %YJU bLVWL&I UL V.,)/. UUL.LLAU 1968-71. The 1970 development plan envisaged a continuation of these high anuual gruwth rates, wnich were expected to average i 0irougn 19i, while giving increased emphasis to the problems of rural poverty and urban unemployment. The prospects for achieving both objectives were considered good. Uolee prices were high and it was anticipated that they would remain buoyant for several years to come. Non-traditional exports (i.e. exports other than coffee and petroleum) were expanding rapidly and there was a demonstrated increase in the capacity of the public sector to prepare and implement investment projects; the number or projects submitted for external financing had risen sharply. 2.02 The Consultative Group, in its meetings of 1971 and 1972, endorsed the Government's plan and offered its continued financial assistance to the Government in achieving its objectives. The Consultative Group strongly emphasized the need for continued growth in non-traditional exports and for higher public sector savings. Higher public sector savings necessary to maintain an adequate level of public investment could be generated by increased government revenues through a reform of the fiscal system. With this in mind, during 1971 the Government introduced a variety of measures aimed at increasing the rate of growth of current revenues. Sales and stamptaxes were raised in April, and the petroleum dollar exchange rate applicable to crude petroleum transactions was raised by over 100% in June. Current expenditures, however, increased rapidly as the actual level of inflation was higher than what had been expected and what it had been historically and public savings declined in real terms. In addition, Bank officials indicated to the Government their concern that an unrealistically high exchange rate was being maintained and that a faster rate of currency devaluation was desirable. - A.5 - 2.03 During 1971 it became evident that the pace of economic growth was slowing down. A sharp drop in coffee prices from previous and projected levels (from 59.43 cents per pound in January 1970 to 47.83 cents per pound in June 1971) resulted in a sudden deterioration in the country's balance of paymenis and lowered public HILvings by reducing the tax proceedi from the coffee Iniport tax. In 1971 coffee exports amounted to as much as 64% of total exports of US$750 million, and a one cent drop in the coffee price meant a reduction of US$8.4 million in foreign exchange receipts and about US$1.5 million in central government revenues. The 1970 development plan had assumed an average coffee price of 56 cents per pound for 1971, against the actual average of 49.27 cents per pound, causing a US$55 million reduction in anticipated coffee export proceeds, equivalent to 7.3% of total exports in 1971 and a reduction in tax revenues of about US$9 million equivalent to 12% of total government revenues. 2.04 The rate of growth of non-traditional exports also fell during 1971. This was attributed, at the time. to three main factors. Firstly, a high level of domestic demand, associated with the previous high rates of economic growth, diverted production from the export market to the domestic market. Seondlv after three consecutive years of rapidly expanding exports, there remained little excess canacitv in the induntripa anneArnead Thirdly- and pnrhanp most importantly, an overvalued exchange rate adversely affected the competitive position of these exrnn. This delino in thA rnt nf rnWth nf nntiraAitional exports exacerbated the balance of payments problem and was a significant factor in forcina A rpdirtinn in the r%-rnmAnta 4mn^vt hUsAfn Nevr heless the balance of payments showed a substantial deficit for 1971 (Annex 1). 2.05 Severe flooding in major agricultural areas during the first half of ~~~~~~ LLI %.%JLULL& 0 CuutiviltL. U.L .LLU.LL~~ C~ L~.LLL L.. in production meant that exports were reduced and that higher levels of food imports were uncesary. Lt UUULL.LUlL Lilt kYUVWleL Was IUrCe( LU reOlfeCT funds to emergency road and railway rehabilitation works in the affected areas, and t LL oncu t:APLg LULe ar.5ing trum thL reduced public sector savings. 2.06 This set of circumstances also had obvious implications for the Government's budgetary revenues and thus its investment program, affecting mostly those sectors where external finance was not generally available. In particular, this was expected to have an adverse impact on government efforts to directly CIODO LIM PuVkL begmenLs 01 tne community. The Bank estimated that in the absence of extraordinary external assistance, 1972 investment would be below that 0 1n-71 2.07 in August 1971, the Colombian Government indicated to the Bank an interest in applying for a program loan, of approximately US$100 million, that would help ease the worsening economic situation. Subsequently, a Bank mission reviewed the country.s balance of payments and budgetary difficulties and found that Colombia met the Bank's criteria for program lending (see Annex 2 for criteria). The IMF had indicated earlier that Colombia was ineligible for compensatory financial assistance because export prices, despite the 1971 drop in coffee prices, were still higher than the five year average used to determine eligibility. A If Ill. LOAN DESCRIPTION AND OBJECTIVES 3.01 The stated major objectives of the Loan were to assist Colombia in: (a) resuming a high rate of economic growth, and (D) Lessening its dependence on coffee exports. To achieve both these major objectives, the Loan had two components. First, the import Component which (i) would allow the rapid transfer of resources which was needed to maintain high growth rates in spite of low coffee prices; this goal could not have been achieved effectively and expeditiously by Bank financing of specific projects; and (ii) would assist the Government in financing projects and programs aimed at meeting the country's social and employment creation goals, taking into consideration that the Loan should not induce growth of public sector investment that could not be sustained after disbursements had been finalized. Second, the Export Component which would help to (i) achieve the target of increasing non-traditional exports by more than 15% p.a.; (ii) provide the exporting sector with financing for fixed assets and permanent working capital; and (iii) meet the country's social and employment creation goals by permitting a wide distribution of bank funds to all sizes of exporting enterprises. 3.02 The Loan was divided into two equal tranches of US$30 million. However, the release of the second tranche, six months after the effectiveness of the Loan, was made dependent upon: (a) an increase in non-traditional exports of at least 15% during calendar year 1972 over 1971; (b) whether revenue measures taken after 1971 would lead to a net increase in tax receipts of at least Col$1 billion beginning in 1973; (c) an increase in the 1972 current Government budgetary surplus of at least 19% as compared to 1971; and (d) coffee prices not in excess of US$0.57 per pound. The coffee price ceiling contained an allowance for increased import costs; any higher price level would raise export receipts and fiscal revenues to a point that would make further Loan disbursements unnecessary. 3.03 US$20 million of each tranche was to be sold to industrial firms for pesos to Day for imnorts of raw materials intermediate nrodnrts and canital equipment. The remaining US$10 million were to be channeled to the export sector for fixed investment. Of the nPan ointerpart PAnerated hv the imnort program, US$15 million equivalent would be used to support Colombia's public investment program. Thp rP1AAqA nf thon fwnAa frnimi o narin1 fwnA in AR wna to be conditional upon Bank approval of the uses to which the funds were being mit- nntud Qlan ilinrm W.hathor Ona~ Cnvair-Dnma&"*-Lwoo mnpf- ft -i+.c fa- a,* 4-i,n-4-i, put the-G ver-e.-.--- mee in it _nar.-ingL requirements for all projects receiving Consultative Group assistance. The secring ISburs m in walnt to to finance working capital for the export sector; its disbursement was not to be subject to Bank approval. The allocation LI 17(1. --O a. u,aL- c LU £04J± L 1. UCP 1W: - A.7 - A ca il Tr ALLOCLAUII UJ DUwil IEUCC~UG (US$ Million) First Tranche Second Tranche Total 1. Import Component 20 20 40 2. Counterpart: Public Investment 15 15 30 Export Sector Working Capital 5 5 10 3. Export Component 10 10 20 TOTAL 30 30 30 IV. IMYUR CuUPUNE1 A. Disbursements 4.01 A documentation problem delayed the initial disbursement until December 1972--four months after the date of loan effectiveness. At first, it had been RnprifiPd rhat diahurAamants would he made only an a reimbursement basis and that all reimbursement applications would be required to be supported by: (i) an invoice from the supplier; (ii) evidence of payment to the supplier; and Howve, n epemer1972 the rninb i,n"a v-ramaf-aA *hmn procedres be cin 1;jn to encourage rapid disbursement and in early December the Bank agreed to forego its earlier d ocumentation reirements A make - -*reme.... on th basiso- foreign exchange licenses issued by BR. 4.02 The first disbursement of US$5 million was made in mid-December 1972. ------------------- -- . -A-1 1 Q'7' A-----4 -f-1, W.LII LIIC LUULLI anu LAal ULUULOCUICHL UULULL.LL&r JAL UL-LU-tA-L Ljsj. 35% of the US$20 million component was allocated to imports of mechanical equipment, about 'u20 each LU electrical equipment anu cLosuciUon makstralskL, oa LU- cultural machinery and the remainder to fertilizers, chemicals, textile machinery, 1% .-- L _ - - and automotive macuinery and equipmenE %annex ffj. inO precXUe eSL.maLed n1Mu uen made at appraisal of the expected share of each category in the total. B. Utilization of Loan Proceeds 4.03 The Loan, as was to be expected, accounted for only a small proportion-- 4.6%-- of the total imports in categories financed by it, and 2.3% of all imports (Annex 5). However, most of the Loan proceeds were used to import construction materials, agricultural machinery and mechanical and electrical equipment. Ius Lltey PLUVIUeU 4111UI L,- LU $Vt.LLUL" WIILil WtLC CApollUingI V%:Ly 1411 LUJY 111 the period 1971-1974. .I04 Tt is difficult to assess what the level of these imports would 11.1ve been in rhe absence of the Loan. Imports made possible by the Loan are bound to be relatively small compared to total imports so that in comparisons against trend figures, the effect of the Loan is likely to be small compared to variations due to other causes. This is particularly so in this case, as the Government increased the import budget in December 1972 when coffee prices started to increase again and generated expectations of a more favorable balance of payments situation. Examination of the figures shows that the rate of growth in import registrations in the fourth quarter of 1972 and the first quarter of 1973 was greater than in earlier quarters of 1972 and those of 1971. C. Utilization of Counterpart Funds 4.05 As noted earlier, 75% of the counterpart pesos generated by the program component of the Loan were to be utilized by the Government te support its public investment program. Annex 5 shows that the major uses were school construction (20%), rural sanitation (18%), housing construction loans (15%) and railway rehabilitation (15%). The President's Report (IBRD Report No. P-1076 dated May 31, 1972) does not contain a specific list of investments to be financed with these funds, although it does prohibit their use for certain purposes, such as construction of military works. The report, however, provided an illustrative allocation of the funds and this is compared in Annex 6, with actual allocations. The education sector received substantially more than foreseen in the Bank's tentative projections, and industry substantially less. Other allocations were roughly as had been expected. Consequently. the funds were used for the intended purposes. 4.06 One condition for disbursement was that the Government had to be meeting its local financinv cnmmitments in all nrniprrs utili7ing external fnds provided by Consultative Group members. Because of problems with late contributions to ATD and TnR nrnippfq in Marnh 197 the Hank Aeled the reinea nf the thiA and final disbursement to April 12. Local contributions to Bank-financed projects were apnprAllv nnt a nrnhlpm 4. 07 TI-tin was poeted that- t-he Addiion of t.he cowntepr pesos -w-uuld enable National Government cash investment to increase, in 1970 constant terms, - -e -u " W WI.ULLUL LUCULI CLUU AA-1/o I 11 71 J kUbLkMaLtU 8.3% without loan). Actual growth rates were a 24.9% increase in 1972 and 17.5% decrease in 1973, i.e. an average urowt te for the two years of i., compared to a projected average of 10.5%. In the absence of the counterpart pesos, it is eotmatCU that government investment would have increased by approximately 20%X in 1972, while the decline in 1973 would have been much the same, at approximately I.7.5%. But whie in real terms the actual government investments were lower than the projected amounts, in nominal terms the targets were achieved, but the rate of infation had unexpectedly accelerated. It would seem, theretore, that the impact on the level of government investment created by the availability of the additional funds generated by the Loan was somewhat less than had been expected. - A.9 - V. RAYUKT CUMUNENT A. Execution 5.01 Subloans. Under the export component of the Loan, both the foreign exchange resources and counterpart funds were channeled by BR's Fondo de Inversiones Privadas (Private Investment Fund , PIF) through financial inter- mediaries. A total of 44 subloans amounting to about US$15 million equivalent were committed by PIF as follows: (a) 18 subloans amounting to US$9.1 million (65% of the total) were committed to exporting enterprises for importing fixed assets; (b) 16 subloans totaling Col$114.2 million (US$5 million; i.e. 29% of the total) were committed out of counter- part funds generated by the Loan to exporting enter- prises for financing permanent working capital; and (c) 30 subloans amounting to Col$21.9 million (US$0.8 mil- lion: i.e. 6% of the total) were lent to exporting enterprises for domestic purchases of fixed assets. 5.02 The 44 subloans were allocated to 32 subprojects. Six subprojects received subloans both for fixed aRRPtR imnnrtq and nermanont wnrking rapitnl financing, 3 for purchasing both imported and domestic fixed assets, 9 for importine fixed aARes only- 4 for nurchasing domestiralnv fi%ved nae nnIy and 10 for permanent working capital needs only. 5.03 Fourteen financial intermediaries participated in the project: 8 cnmmercial hanka 5 fina- arao nn so- AS-lanm-N+ l .-A 1 .m..i ..... , bank. While the financieras and the agricultural bank provided subloans mostly for ;mnnrt4".n f4-.OA ...o4 f-l. f-u_ o.oo V-1,.. - .11 L ...m msyL Luli- A- ,R- UXLL. DLA UL O LID UVELCU MLa LuLC categories, i.e. financing of working capital, and imported and domestically- *.04 Funds withdrawal. D.usbursements of the Loan suffered substantial delays compared to appraisal estimates. While the Bank had estimated that disbursements would be CompletedI in 15 mo nth,hs took* abou 48n h, manl du to deIIys wvu.u c LusyCoo usAJ sunll, LLJU LUU1' UDUUL 90 morthu, ma1nly aue Lo aetLayS in the appraisal and subsequent disbursements of one subproject I/ and to cancellations of two other large subprojects at a late stage. Both the terminal date for subproject submission and the closing date for subloan disbursements were extenueu tree times by the Bank (para. 5.07), to allow funds released by the two cancellations to be used to finance 3 other subprojects in 1975. 1/ The subproiect involvine the Rinaralda qiiear Cn. an enternrica with o,n,,om,-mont and private participation, was submitted to BR at a very early stage of imiulementation- AvAn bpfnrp thp fpsnihil4t-ty 2t_--- -- v--m rt o.A- completed only 12 months after the Loan was made effective and it took the govArnment nithoritioa and financial int_rmiA4arie 9 months anA DTV - L-11 4 months, to review the subproject's feasibility. Also, IFC was approached Lo . . .UaLL.y assU, C.LLIVU811 Lr%. L.LL&LL.y ULU IOL participate in the subproject, this delayed the Bank's review and approval by 9 months. In total. 34 months elanned hPtwPn the stihnrnioec's a.1mi-non and approval.. - A.iu - 5.05 Project implementation moved rapidly in 1973, when approvals amounted to or, of t tlO Vodtlm u-Aftt LU tt.J 14tS -UL. --AI a .- t tdf t..A- #LUk- foreign exchange line, but it slowed down afterwards mainly due to delays in 5.06 Other de'ays, 'L about a year, were causeu by late cancellations of two textile subprojects; neither the intermediaries nor BR urged subborrowers to move faster in project implementation or consider SUDOan cancellatIOU. Neither did they attempt to find out the causes for delays or to detect whether cancellations could have been made earlier. The partial cancellations of the two textile subloans amounted to US$925,000 (US$371,000 and US$554,000, respectively), i.e. almost 10% of total amounts approved under the foreign exchange line. The cause for the cancellations was the contraction in external and domestic demand for textiles in recent years, causing many of the textile enterprises to reconsider their expansion programs. If the intermediaries had followed up more closely on these cases, it is likely that the cancellations would have been made earlier and disbursements of the Loan would have taken about one year less. 5.07 Extension of terminal and closing dates. In order to allow approvals and disbursements through 1974-75, the terminal date for subprojects submission and the closing date for disbursements had to be extended three times by the Bank: (a) the original terminal date for subproject submission was December 31, 1973. It was extended first to June 30, 1974, then to September 30, 1974, and finally to December 31, 1975; i.e., for a total of 24 months; (b) the original closing date for funds withdrawal was December 31, 1974. It was extended first to December 31, 1975, then to June 30, 1976, and finally to September 30, 1976; i.e., for a total of 21 months. All extensions were based on recommendations of Bank supervision missions which reported that delays were due to specific subprojects and that prospects for completing approvals and disbursements under the Loan were good. 5.08 Interest rates. The interest rate of 19% to subborrowers. althongh above the 18% rate charged under the fourth financiera project (Loan 742-CO), has turnAd it t o hp lnw Pnmared to inflntin in tfhe 1979-76 nayinA_ Rnk funds were lent to BR at 7-1/4%, which assumed the foreign exchange risk and relent the fuinds at 16% to f4,nnc4n intearmea4mries, tobe passed on tou oo^r at 19%. However, except for 1975, inflation rates have been higher, amounting to 22% in 1973, 5.l ~ I td.*t 1UtA SO- - _L -. I -J -LL JLULO W LICC LLL JJaiir. CAI ILC the terminal date for subproject submission it also requested that interest rates Ltd~ CIJI OS.S.~JW S.~ IC ~~ U L.' LU L V . L L u LIu L Lii I. Li.Lt-LL ._LIiLL k A- project (Loan 903-CO); consequently, subloans under the foreign exchange line apptovu In 17It aU 1t t LULCLCUL Laken UK 7U/o anU LJA, LeA1*cLiVely*_ In the event that future inflation rates in Colombia develop as expected 3/,real intLerst LLe LU sUUUULLUWeL Will UC pUsiVe faUUL /o p.a. aVerage U 811 suD- loans). 1/ During the first semester of 1976, the cost of living increased by 16%, according to DANE (the Government's Statistical Department). For the total year inflation is expected to reach at least 25%. 2/ One subloan in domestic currency approved in 1975 carried a 23.5% interest rate. 3/ LAC2 expects inflation rates of 18% in 1977, 15% in 1978, 12% in 1979 and 10% thereafter. - A.11 - 5.09 After the cancellation of the second tranche of the Loan in 1973, the Government approved a similar credit line of Col$600 million (Monetary Board Resolution No. 9). This amount was slightly less than the second tranche of the Loan and was to be channeled through PIF with minimum requirements. The interest rate to subborrowers under Resolution No. 9 was only 14%, well below the 19% charged under the Loan. In addition, in 1974 another line of Col$30 million also at a 14% interest was channeled through PIF by the Government (Monetary Board Resolution No. 10). The low interest rates applying to these credit lines was intended to stimulate investment, especially in export oriented industries. 5.10 Foreign exchange risk. All subloans under the US$10 million export component were denominated in donmestic currency and AR has hAPn rovring thp foreign exchange risk against an annual fee of 8.25% 1/on loans outstanding. Annual devaluation ratese however, have been higher thus fa (1.1 IPAeno i n 1973-76) and are projected to average 8.7% during 1976-84 2/, resulting in an ~ 1 0*Rejectio...n of.k subloa.n uet- by, PTF wrer frequent becaun.,Oe many sub- projects could not meet the established export criteria. 3/ Out of a total of of total amounts requested, which is very high compared with the 16% average for a.L.L i LE VCLL.LLAUO UZLWCCLL ±7UJoI1. The UUmanu LoL sub."Loano was eVeu higher under the domestic currency line, due to the attractive feature of permitting the LinanCuLg U- pereUsneI wOrking cap. ,euJum andU ULg-teLm. rw -uU ---- requesting domestic currency subloans, however, could meet the export criteria; out of 49 requests 23 were rejecLea, as agaius I out of 3U requets under the foreign exchange line. Under both lines rejections amounted to 68% of total amount requested. B. Nature of Subprojects 5.12 Definition of export subprojects. As the basic objective of the export component was to develop export activities in.the industrial and agricultural sectors, under this component of the loan only export subprojects were eligible for financing. Export subprojects were defined as those able to generate from export earnings a positive net foreign exchange impact within a period of five years after implementation. For estimating the net impact, all direct foreign exchange costs of a subproject were to be deducted from export revenues. While this criterion was found to be operationally adequate as a means of determining the eligibility of subprojects, it was difficult to follow-up, because super- vision of subprojects is needed for at least 5 years. In addition, it has been almost impossible to differentiate exports accruing to subprojects from those accruing to the enterprises. Consequently, the effectiveness of the criterion is very dependent on the quality of the initial appraisal of the export prospect of the subproject. I/ L11Lsb annulLee a~mounts to 97.25(/ ad 14.25 for sul.bUlan approved J_n .71 4 andI 1975, respectively. 2/ LAC2 expects annual devaluation of 10% in 1977, and 8% thereafter. 3/ Subprojects had to demonstrate that in the first 5 years of operation they would generate exports amounting to at least the investment and operating costs in foreign exchange (para. 5.12). - A.12 - 5.13 Size of subloans. To ensure a reasonable spread of loan funds was established. In practice, however, larger enterprises with larger sub- projLcL s U UhLL UbteoULLULC LIHnte tnsmaLleL Unes Lo iLLC=aD1 =A.VULLO. About 73% of the foreign exchange funds were used by only 8 subloans (all above UgivuuVJ ana aDout 943/ or tne umestic currency fuuu were utilizeu uy only 3 subloans (also above US$500,000 each). Thus, the average subloan size under the Loan was about double that of normal PIF subloans. Under the foreign exchange line the average subloan size was US$507,000, compared to PIF's average of only US$26l,uu; and for the domestic currency line the average suD- loan sizes were US$219,000 and US$130,000, respectively. The large average sub- loan size was due in part to the aggressive and active participation of commercial banks, which had close relationships with large exporting companies. These banks submitted most subloans close to the US$1,000,000 limit. 5.14 Size of sponsoring enterprises. Large sponsoring enterprises obtained most of the funds under the Loan. Enterprises with total assets above US$4 mil- lion received one half of total subloan amounts, and enterprises with assets above US$25 million, about 17% (compared to only 7.5% under all PIF's operations). The participation of small enterprises with assets below US$0.5 million amounted to only 0.6% of total subloans, while they received 10% under all PIF subloans. The higher proportion of large enterprises is not surprising, however, since several of them had in effect been excluded from further access to Bank financiera lending (having obtained a total of US$4 million) and because larger firms were generally in a better position to mount export projects. 5.15 Geographical distribution of subprojects. Industry in Colombia is concentrated around 4 main cities: Bogota, Medellin, Cali and Barranquilla. The distribution of subloans under the project, both in the domestic currency and foreign exchange lines, clearly followed that concentration; 85% of subloans were granted to subproiects located in the four main cities. Mainly due to the larger participation of commercial banks with their extensive branch system, however, subprojects in remote areas obtained a higher share than the average of PIF's financing. The share of subprojects in "non-traditional" areas, like Bolivar. Risaralda. Meta and Nariho. reached double the PIF average. 5.16 Sectoral diRtrihition. Although aorirultiural exnort nrierts wPrP expected to account for an important share, industrial subprojects utilized most of the fun"aQ Tn tho anmpcrir PiurrencY lino fn-r eramnleP agcrritural sunrnijcts obtained only 2% of subloans under the project, compared to 14% average under PTF~ opera~o No interational tourism projectso we,re fl-ncnd --t-n 14&-l because of the heavy demand to finance industrial subprojects, and the greater A., tJV~ .UUZ J t.-J.LU L r WLL LILl.L tAJUL LUI c'. 1.0J %LULU U1= _C LLLU eligibility criterion for export projects. 5.17 Five industrial subsectors--textiles, food products, shoes and garments, chemicals, and non-metallic minerals--obtained 80 of the domestic currency funds (compared to a 48% PIF average) and 79% (59% under the PIF) of the foreign exchange funds. it seems that these subsectors had the best-opportunities to increase exports. Relative to PIF's operations the large proportion of shoes and garments subloans is striking; this subsector received 10 times its average under normal PTF operations. 1/ There was no "free limit" for Bank approval of subloans; approval authority up to the US$1 million subloan maximum was exercised by BR. - A.13 - C. Impact of subprojects 5.18 Actual exports of subprojects financed under the Loan have exceeded -----------n --t~ ---r- -~mwte of --b-orrowers smount-ed to U_$296 m.il~ lion for the first five years of operations. As of December 31, 1975, with most subproj-- In +-S%-;-1,4A -F4 ~ . amounted to US$240 million, and the latest forecast indicates that subborrowers' edmexpor twse would amunu Lov avorowV iAun LJ avuv ummi m.uto ~~ ~ WJU.LU ou 1U L. L L VW~UL_ UOY- tVV~ UL.L.LLU, -l.J.J o v com-J -men*sI± LULLL after five years of operations 1/. Most exports, however, accrue to the larger subrrowers which have gCLLna.Ly succeeUeU Li InureaSUg exports DeyUnU Uiginal expectations, while many smaller subborrowers have been facing difficulties in aeyL.L LLg tneir export commitments. UUL or tne 3a suoDorrowers under one project, 17 are accomplishing the export goals, with actual exports 54% above expectatLuIS on average, whereas 15 are not, with actual exports amounting to only 19% of expectations. 5.19 Employment. The direct employment impact of the subprojects financed under the Loan has been comparatively modest. In total, 4,445 jobs were generated at an average cost of US$11,300 per job, which is about 60% higher than the US$,UUU average found by the 1974 Colombia Special Study of 29 financiera financed subprojects 2/. The difference appears to be due mainly to the capital intensity of textile and chemical projects, i.e. of two subsectors with a strong export performance which accounted for about 40% of total subloans. On the other hand, it is important to note that the average investment cost per job created in the case of all projects financed by PIF up until 1974 is estimated to have been US$13,400. In this context projects financed under the Program Loan would not be unduly capital intensive. D. Institutional Aspects of the Projects Export Component (a) Banco de la Repfiblica 5.20 Department of Development Credit. The Bank's DFC lending in Colombia has been channeled through BR and administered (with increasing responsibilities) by DDC. For its DFC loans, the Bank has established specific lendina policies regarding allocation of funds and institution building goals, separate from those applicable to the other operations administered by DDC. In view of the nroaram loan characteristics of the Loan, however, the Bank considered that regulations and procedures of two existing funds. the PIF and Fondo Financiero Industrial (Industrial Financing Fund, IFF) were satisfactory for encouraging development of the exporting sector and for channeline Bank funds. In addition, it was felt that negotiations would be simpler and faster if PIF and IFF were used. Further- more. a wider range of intermediaries would he ali ia en participae in te Lan thereby speeding up utilization of the loan proceeds. The selection of the two funds. however. did not result in any navantaeoa enmpared ton the ther Bnk ine I-----------------------Ban administered by DDC. Moreover, it caused delays in loan effectiveness, because some time-ronsuminc modifiratinnc tn PTV's reunations were nees. I', These modifications, which included extending maximum subloan terms from 10 to 15 years, andI waivingy PTF'P- li4r nf qnT fnr __-;+_1 caia-iacn eaiet its 1/ Estimates are based on statistics of the Government's Export Agency PROEXPO (Annex 17) in the absence of actual figures based on the supervision of subproject (para. 7.29). 2/ IBRD Report No. 1037-CO, "Colombia Special Study: Economic Impact of DFC assisted projects", January 23, 1976. - A.14 - total operations, were finally incorporated but only on an ad-hoc basis and applicable only to subloans financed out of the proceeds of the Loan. 5.21 IFF Participation. To facilitate participation of small sub- projects and enterprises, the Loan Agreement foresaw the participation of IFF in addition to PIF. However, no subprojects were channeled through IFF, given its more restrictive requirements 1/and the fact that all subprojects eligible for support by IFF can also be financed by PIF. During negotiations the Minister of Finance proposed a 50/50 allocation of funds between PIF and IFF, which might have facilitated access to the Loan by small scale enter- prises. 21 However, since the main objective of the export component was to stimulate new exports and the larger enterprises were in a better position to export, no minimum allocation was established. As a result, small enter- prises with assets below Col$20 million (eligible under IFF financing) obtained subloans for only US$55,000 out of the total US$9.1 million of subloans in the foreign exchange line, or less than 1% of total. 5.22 DDC's management and staff. In general, DDC efficiently handled the subloans channeled through PIF. DDC is well managed and has a staff of 55 persons, 33 of whom are professionals. 3/ The review of subproiect appraisals prepared by intermediaries has been satisfactory, on balance, in spite of a relatively high turnover of DDC's financial analysts. During 1972-75, when subloans under the Loan were reviewed, 8 of the total 16 financial analysts had to be replaced mainly due to DDC's relatively low salaries (particularly compared to those of commercial banks). Steps were taken to improve DDC salaries and training under the two most recent Bank financiera loans (942-CO and 1223-CO). 5.23 Engineering and technical aspects review. DDC's review of engineering and technical aspects of suboroiects hag heAn imnroving since 1972- due in part to Bank efforts connected with the Loan. At the Bank's suggestion, DDC's Pnpineering staff was increased from 2 tn & in 1977 and n manual wnq nrenared hV a consultant to provide guidelines for technical reviews. Initially, however, exP~uPempasi wa m1a-p nn~r~i~o4ngaspctsand - Bank- supe-vsion. is. o found that, instead of reviews, DDC was often undertaking reappraisals of projects, the experience gained by DDC's engineers, the impact of the Loan on improving quality" and copem of DDreviewso-f enieeigA technical aspects "ade-u-cy of localization, costs, procurement prices and environmental impact) has been processes, technology and equipment selection is still needed, DDC--with Bank UVLaL.ULu--cUnUnues LU arrange trainung programb Lur its engineers. 1/ To be eligible for IFF financing, subprojects with assets above Col$5 million (about US$180,000) had to pass the additional test of having no more than Col$100,000 in assets per employee and three was an upper limit of Col$20 million in total assets for eligible enterprises. 2/ Letter from the Minister of Finance to Mr. Alter, dated January 28, 1972. 3/ 1 Director, 2 Assistant Directors, 4 Division Chiefs, 16 Financial Analysts, 4 Engineers. 3 Economists and 3 Accountants, 4/ On average, it took DDC 4.5 months (including engineering reviews) to review the appraisals prepared by intermediaries for financing under the Loan as against 2 months under more recent DFC-type loans. - A.15 - kLJJ) riacl ±Ld1L~±jIntermedit~aries /.L Participation or intermedlarles. In contrast to the DanK other DFC lending in Colombia, commercial and agricultural banks were allowed to participate in the Loan, together with development banKS Ifinancieras). Eign commercial banks, 5 financieras and 1 agricultural bank intermediated the 44 subloans under the Loan. Commercial banks were by far the most active participants; out of the 18 subloans in the foreign exchange line commercial banks intermediate 10 subloans, equivalent to 57% of total volume, and out of the 26 subloans in the domestic currency line they intermediated 16, or 76% of total volume. The 5 financieras, which had access to other Bank funds at the time, achieved a relatively modest participation under the Loan, committing only 32% of the foreign exchange line and 24% of the domestic currency line. Finally, the agricultural bank participated in the financing of one large sub- project, a sugar refinery. 5.25 Commercial banks were more aggressive and active than the financieras, due to the former's large size of operations and to their often closer relation- ship with larger enterprises and exporters. Under the domestic currency line, the average size of commercial bank subloans was twice the financeras', and sponsoring enterprises that received subloans from commercial banks were 4 times larger than those financed by the financieras under the foreign exchange line, and 2 times larger under the domestic currency line. 5.26 The most active commercial bank under the Loan was Banco de Colombia, Colombia's largest commercial bank. It participated with 5 subloans in the domestic currency line and with 3 subloans in the foreign exchange line, and in total financed 25% of all subloans. The most active financiera was Cornoraci6n Financiera del Valle. Its 19 subloans under the domestic currency line and 4 subloans under the foreirn exchange line. accounted in volume for 15% of all subloans. 5.27 Appraisal by intermediaries. The financial intermediaries generally nprpd qnHQfnrftnrv Annrnicnlc~ fnvr cziihinvn4ontic~ 4i-uliy4ney f4v'c.4 nen-T,, n These subprojects have been operating in most cases with little difficulties. However, under the local currency line for permnent working cap-1 financingL (of which 75% was channeled by the commercial banks), only brief superficial reviews t r- pepar_pi -1.f 0- -nrne)n deisons base mainy on 0-~ __i_ collateral. Seven of these subprojects have been facing serious marketing -rbesta led eutdi.t.wo bankrupl.tcies..L. M__JL --4-SJ1LLaj-OJoaL might have permitted the detection of project deficiencies in several cases. 5.28 In the foreign exchange line full subproject appraisals were prepared, In-- quaifty waO UOULif OL.1LatLULY W.LLH LCUPtwUiLU WL&CL.LLUu- processes, financial and economic analysis. Engineering and procurement aspects, however, were sludm analyzeu auequaely uy Lue inLUrMeCrUIL.eb kp4LL.Lep cularly commercial banks) and had to be reviewed extensively by BR. 5.29 Supervision of subprojects, either by the financial intermediaries or U.LrLLy Uy uJJU, nUb Deen raLner slack. Supervision reports nave mostly been superficial and even the standard supervision forms have often not been fully completed. nus, there is little factual information available from these reports - A.16 - on whether subprojects are accomplishing their export commitments. Also, thus far, insufficient information about actual production of subprojects has been provided and no comparison between expected and actual costs has been made. In order to prepare this completion report it was necessary to request additional information from the assisted companies and from PKUEXPU, the Government export agency. VI. ACCOMPLISHMENT OF CONDITIONS AND THE CANCELLATION OF SECOND TRANCHE 6.01 Loan conditions for the release of the second tranche have been summarized in para. 3.02. The growth of non-traditional exports substantially exceeded the target growth rate of 15%. From 1971 to 1972, these exports increased by 64% in value, and in 1973 a growth rate of 36.5% was recorded. Some individual 1972 increases, along with the value of export registration for each product and its percentage share of total 1972 exports, are given below: Table III Export Registrations in 1972 for Selected Products Value of Export Shares of Total Export Increase in Registrations Registrations 1972 1972 (US$ m) 1972 Clothing and Textiles 74% 44.7 5.4% r.M-1on 527- q0-4 6.12 Sugar 62% 30.7 3.7% Cement 107% 5 9 077 Leather and Hides 218% 23.4 2.8% 6.02 While a precise estimate is difficult as many things happened simul- current revenues in 1973, as a result of new fiscal measures or improvements in tax collection administratiOn iLrouced aIE 1711., Was not aLLined on sChedUle. In practice, since the target was expressed in nominal rather than real terms, it was difficult to determine ex post what proportion of increased revenues were attributable to existing or new fiscal measures. Tax revenues in 1973 increased by Col$4,280 million, but most of this growth can be attributed to inflation, higher coffee prices and a higher level of economic activity in general. The new measures which were planned, comprising higher customs duties together with a presumptive tax on agricultural income, scheduled to be introduced in 1973, would have enabled the Government to reach the target. However, introduction of the latter tax was postponed. It was replaced in 1974 by a general fiscal reform including a presumptive income tax covering all sectors of the economy. This tax has provided approximately 45% of all incremental income tax revenue since its introduction, generating (in constant 1973 pesos) Col$642 million - A.17 - in 1974 and Col$1,651 million in 1975. Overall, the 1974 fiscal reform has exceeded the Bank's expectations at the time the Loan was made, both in terms of fiscal revenues and improved administration of tax collections. 6.03 The target of increasing the Government's current budgetary surplus hv 19% in 1972 wma nnt a14aelA Tn 1Q79 thp rnvernoe fnrfnr (ratin of rnrrPnt receipt to expenditures) remained unchanged at the 1971 level of 1.41. In 1071 4.- AelnAt .34 but recover A agai~4, -- 1 I.) ;_, 107. 'r'h40 -~.A confirm that the target for new tax revenues was not achieved. Thus if the pri4ce of coffee had failed tA increas beon,S$.7 -- -- there would have been another reason to cancel the second tranche of the Loan. 6.04 As coffee prices had risen above the specified maximum of 57 cents ------------------no. I- n -71 XT --- per puunu, te secou tnche was canceleu oi reLuuLy Lo, L1J. r1ULLLy LIrW York spot prices for Colombian coffee for the years 1970 through 1973 are given in Annex 7. By tne time tne Loan became ellective (August 4, 1y9, the price of coffee had already risen to 63.75 cents per pound--6.75 cents per pound above the cut-off mark. Although the balance or payments constraint had already Deen lessened by the time disbursements commenced, the Loan almost certainly had some impact prior to effectiveness. Thus, the Colombian authorities were in a position to free imports as soon as they were reasonably sure about the size and timing of the Loan. 6.05 It has been suggested that the second tranche may not have been cancelled if a terms of trade criterion had been used, rather than the price of coffee. Although it may have been better to use that criterion, its use (as shown in Annex 2) would also have resulted in the cancellation of the second tranche. If 1970 is taken as the base year, Colombia's terms of trade worsened during 1971 and the first half of 1972, but improved in the third quarter of 1972 to become better than they were in the base year and remained so for all of 1973. VII. CONCLUSIONS 7.01 The main objectives of the Loan were generally met quite successfully. The availability of the Loan enabled the country to maintain imports at a higher level than would otherwise have been possible during 1972 when Colombia had the heaviest foreign exchange constraint. Both Bank and Colombian officials agree that the Bank's insistence on specific improvements in the public sector current surplus was a significant factor in encouraging the Government to introduce desirable fiscal and monetary reforms, even though established targets were not achieved on schedule. The longer term objective of increasing Colombian non- traditional exports was also achieved. Government policies and incentives resulted in higher than expected export growth and the export component of the Loan helped to finance some sound and worthwhile export oriented proiects. It is difficult, of course, to assess to what extent the improvements in the rate of economic growth and in the rate of erowth of exnorts after 1971 were attributable to the Loan. A variety of other internal and external factors influenced the situation. including the recovery in noffee nrice. during the _ecannd half nf 1979. 7-02 On the whole- itseePmTsr thmt- t1 4. 4a 44 nn to nk t then relea o nf the second tranche of the Loan to the price of coffee was sensible, despite some factorl thatiau Cof l in 1971 r T1, and prov the main-4 factor that caused Colombia's economic difficulties in 1971 and provided the main the ~ ~ --- "Ll L .&'...O r oe ag~ai LL I LIC~ secondLI hia.L.L . VL 2/ A10 Colombia's balance of payments and fiscal situation recovered rapidly. An alternative would have been to use a term of trade criterion for release of the second tranche, but this would have been much more difficult for operational purposes because of the time required to collect all of the required economic data. In practice, coffee prices were the maior determinant of Colombia's terms of trade during this period. 7.03 At first sight, it might appear somewhat inappropriate to have attached some of the other conditions (such as the net increase of tax receints by Col$1 billion in 1973 as a result of measures taken after 1971) to the release of the second tranche. The decision on whether to release th Rennnd tranche was to be taken six months after loan effectiveness, i.e. February 1973, and at that time it would have hen difficnlt to assess the imnaf-t of the finsrMa measures that had been taken. However, these targets represented the results of !agreemennt.rPqr'hPd eiiirinvY T.ni nagntintinc nn -qanacre of aecnomic measures to be undertaken by the Government. Their inclusion as conditions for release of tlla QapnnA t-rrnit-1o vffn i -M"AMA i^ -.p;d ac I byV the Coobin on introducing the agreed measures. Thus, despite the potential measurement difficulties, they would av provideda a difloprC_ ul__alogue ~ *a~~-kFWL LULL Uy LUL LL L -1 d algu with the Government had coffee prices remained low. 7.04 The question of whether to link the cancellation of the second tranche o e lne. tr expo rt~LL componen L 11JIJ..L~I L IL Ce 1dOan LU LU L 4-t:J L UU WUb a U1.1J.lC ULL one, to which considerable thought was given at the time of project preparation an.u implementatiun. 01HC6-LUCmUEL I H OUWT 1WGR and £ULUILLUL. ±C LW S.LnceCHL tUe tw c[onnt IC Loan were viewed as complementary, and the various agreements reached during Loan negotiations applied to both components, it was eventually decided to link them together in the tranching arrangements. Furthermore, if coffee prices were to rise again, Colombia would have sufficient resources to continue financing priority export projects. In practice, this did occur. Following the cancellation of the second tranche Colombia established a special line of credit, using internal resources, that was similar in size and purpose to the second tranche of the export component. 7.05 It is rather difficult to draw many lessons from this rather unusual loan that would be generally applicable to normal Bank lending operations. However, the following detailed points may be relevant to other program loans or export oriented loans: (a) the desirability of devising simplified disbursement procedures to avoid delays in what is meant to be a fast disbursing loan; (b) the need to agree in advance on what records should be kept if the Bank wishes to review in detail the utilization of non-standard components e.g. import financing; (c) when considering the criteria to be used to define export subproiects for the purpose of Bank financing, it is important to recognize that the criteria will have to depend primarily on an adequate ex-ante appraisal of the export prospects of the subproject. Once the subroiect has been comnleted it iR often difficult to distinguish exports attributable to the subproject - A.19 - from exports attributable to the company as a whole. In addition, it is difficult to determine who was at fault, if export targets are not met, unless the export potential of the subproject was properly examined before the project was financed; (d) the fact that it is often the larger companies that are in the best position to export and thus it is difficult to include employment generation or regional development objectives in a loan whose primary focus is on export promotion; (e) the practical difficulties involved in trying to assess the impact of specific economic measures that are taken by a borrower in the context of a program loan because of the multiplicity of other factors that influence the development of a national economy. LCPDF November. 1976 COLOMBIA, Loan 842 Coin letion Report Balance of Payments Data (1968-74) (US$ Millions) L968 1969 1970 1971 1972 1973 1974 FOB Merchandise Exports 605 672 788 752 979 1,26:3 1,494 FOB Merchandise Imports 615 648 802 900 848 982 1,510 Trade Balance - 10 24 - l -148 131 281 - 16 Service Receipts 179 198 212 222 228 285 364 Service Payments 251 291 347 385 388 442 533 Goods + Services Balance - 82 - 69 -149 -311 -- 29 124 - 185 Current Account Balance -164 -175 -302 -453 -.191 - 56 - 322 o Private Capital 18 109 100 106 72 25 28 Public Capital L46 133 161 130 255 285 158 SDR Allocation - 21 17 18 - - Net Reserve Change 6 - 3 6 82 -.164 - 213 389 ( - = Increase) Short Term Errors and Cmissions - 6 - 65 14 118 10 41 - 253 Source: IBRD, 1190-00, May 1976. - A.21 - ANNEX 2 COLnMRIA: T.nan R2-CO, Comnletion Report Terms of Trade (1970-73) Years and (1970 = 100) Quarters Imports Exports 1970 100 100 1.000 1971 110 103 0.936 1972 I 122 114 0.934 II 125 119 0.952 III 129 134 1.039 IV 138 137 0.993 1973 I 145 156 1.076 II 154 164 1.065 III 171 173 1.012 IV 186 194 1.043 Source: IMF, International Financial Statistics, July 1975. COLOMBIA: Loan 842-CO, CompletionReport. Impor t Componn t Disbursement Schedule (Us$) % of Total Purpose 12/4/72 12/13/72 1/8/73 1/12/73 Total Disbursements Agricultural Machinery 292,588 311,137 - 1,076,877 1,680,612 8.4 Fertilizers 57,508 6,118 31,245 595,287 690,158 3.4 Chericals 314,683 - 160,325 475,008 2.4 Construction Materials 848,933 798,044 - 2,712,821 4,359,798 21.8 Electrical Equipment General 987,260 945,839 1,580,556 240,897 3,754,552 18.8 > Communications - 14,312 299,250 - 313,562 1.6 Mechanical Equipment 1,935,100 2,586,779 2,207,95:3 194,530 6,924,362 34.6 Texitile Machinery 291,026 334,831 180,045 19,253 825,155 4.1 Automotive Machinery and Equipment 272,902 - 700,951 - 973,853 4.9 Miscellaneous - 2,940 - - 2,940 - Total 5,000,000 5,000,000 5,000,000 5,000,000 20,000,000 100.0 Source: IBRD, Controller's Department COLOMBIA: Loan 842-C, Copletioi_Report Import Component Project Share of Total_Imports /1 (US$ Million and Percentage) 1970 1971 1972 1973 1974 Construction Materials 13.9 13.7 5.3 4.- 27.2 % Financed by Bank Loan 75.2% Fertilizers 7.7 10.7 10.9 36.1 99.1 % Financed by Bank Loan 6.3% Chemicals 63.8 72.5 76.0 95.9 188.0 % Financed by Bank Loan 0.6% AgricJltural Equipment 15.3 B.6 9.8 13.7 52.5 % Financ-d by Bank Loan 5.8% Electrical Equii:3nt 65.4 7.6 69.6 73.0 109.1 ' % Financed by Bank Loan 5.8% Textile Macfxiner7- 15.4 15.5 25.1 23.2 26.8 % Financed by Bank Loan 3.3% Mechanical Equipment 135.0 181.0 151.5 159.6 15.8 % Fina:ced by Bank Loan L.6% Automotive Equipment 91.2 83.7 89.7 98.9 1(0.3 , Financed by Bank Loan 1.1% Sub-Total h07.7 461.4 h38.h U0 .0 821.8 % Financed by Bank Loan 4 . 5, Total All Imports 8WL.0 929.6 858.9 1,061.5 1,336.6 % Financed by Bank Loan 2.3% /1 CIF Basis Source: INCOMEX COLOWMBIA Loan 842-CO. Completion Report "L" WQMannaLt Allocation of Counterpart Funds A.0). Percent 12/13/72 2/7/73 4/12/73 Total Of Total Ministry of Agriculture: Rehabilitation Banana Zone 266.785 - 266.785 1.78 Sub Total 266.785 - - T77 Ministry of National Education: School Construction 1,600.711 1,322.222 - 2.922.933 19.49 Scientific Studies 177.857 - - 177.857 1 19 Credito Educativo - Formacion de Profesores 120.053 - 120.053 0.80 Allocation to Instituto Colombiano de Pedagogia 93.375 23.611 - 116.986 0.78 Universities: Equipment/Construction - _ I __L Sub Total 1,991.996 1,762.500 437.637 4,192.133 27.95 Ministry of Public Works: National Road Plan 518.008 - - 518.008 3.45 Railways Rehabilitation 2.223210 -=z.naan _WU gg Sub Total 2,741.218 - 2,741.218 113.27 Minisry o the Cabinet CoMmunity Development Program - 119.167 121.663 240.830 1.61 Promotion Native Business 2213.055 177,243 405.298 2.70 Sub Total - 347.222 298.906 646.128 4.31 Minastry oEPublic Health: Hospital Construction 305.555 87.527 393.082 2.62 Construction Health Centers/Posts in Rural Areas 83.333 262.582 345.915 2.31 Medical Investigation and Drug Analysis 159.722 503.282 663.004 4.42 Basic Sanitation - Rural Areas j97a.222 ii&10J5 2.708.127 18.05 Sub Total - 1,520.832 2,589.496 4.110.327 27.40 Ministry oF Economic Development Housing Construction Loans - 1,127.778 1,196.936 2,324.714 15 50 Industrial Development * 152.778 240.700 393.478 2.62 Departmental and Hunicipal Planning ad Development - 27.778 43.764 71.542 0.48 Regional Develooment 61.111 192.560 253,671 1.69 Sub Total .--7. .=f*M --'2| 6. Total Total L. 5,000.000 5,000.000 5,000.000 5,000.000 100.00 /I Columns nay not sum to totals due to rousding. Source: Ministry of Finance - A.25 - ANNEX 6 COLOMBIA: Loan 842-CO, Completion Report Impur Uumponun Allocation of Counterpart Funds Compared to Projections (Percentage Terms) Tentative Projections Actual Allocation Rural Development 33.3 21.4 Education 11.7 26.8 Public Health 6.7 9.4 Industry 20.0 5.4 Transportation 23.3 18.2 Mineral Resource Development 1.7 - Economic and Social Studies 3.3 1.2 Housing - 15.5 Regional Development 2.1 Total 100.0 100.0 Source: Compiled from data given in President's Report m. Aal" q suF 1e UyyJ.C .J ,n L ~.L C COLOMBIA: Loan B42-CO,_Completion_ReLort Import CompoLent New York Spot :Prices. Colombian Mams S Centsper Poundi Month 1970 1971 1972 1973 January 59.43 52.10 51.78 69.10 7-ebruary 57.18 50.35 50.13 73.88 March 57.50 ;9.93 51.70 73.50 April 57.23 48.35 51.75 70.65 May 57.78 h8.58 53.03 73.35 June 56.80 [7.83 53.65 76.10 July 56.25 47.75 59.48 75.25 August 55.95 h8.20 63.75 73.27 September 55.65 47.93 59.73 72.60 October 56.05 47.90 60.90 71.78 November 5h.80 47.90 61.43 71.le December 52.45 52.40 62.70 71.28 Average 56.42 49.27 56.67 72.66 High 60.00 52.63 65.63 77.00 Low 52.00 47.38 49.88 65.00 Source: IBRD, Economic Analysis and Projections Department. COLOMBIA: Loan 842 - Ccpletion Report EXIORT COMPONENT Project Data (as of March 31, 1976) Loan Proceeds Foreign Exchange Line Counterpart Funds Domestic Currency Line Imported Permanent Domestic FixedA!sets Workinj_Cpital Fixed Assets (inU$illion) (in Col$ million) 1. Amounts A. Approvals 10.0 114.5 21.9 B. Commitments 9.14- 114.3 21.9 C. Disbursements 7.74-/ 114.3 19.0' D. Free limits None, all subprojects were to No subprojects were to be No subprojects were to be submitted to the Bank submitted to the Bank be submitted to the Bank 2. Disbursement Time A. Appraisal's disbursement 15 months 15 months 15 months time estimate B. Actual disbursement time 48 imonths 24 months 48 months 3. Dates A. Loan Agreement June 28, 1972 B. Effectiveness - August 24, 1972 C. Terminal Date for Subproject Submission: - original December 31, 1973 - - Ist Extension in 12/18/73 June 30, 1974 - - 2nd Extension in 7/74 September 30, 1974 - - - 3rd Extension in 7/75 December 31, 1975 - D. Closing Date for Disbursement - original December 31, 1974 - - 1st Extension in 1/8/75 December 31, 1975 - - - 2nd Extension in 12/19/75 June 30, 1976 - - 3rd Extension in 2/4/76 September 30, 1976 - - 1/ About US$400,000 will stilll be coemitted by the final closing date of September 30, 1976. Total comitments, therefore, will total US$9.55 million in the foreign exchange line. ý./About US$1.B million will still be disbursed until September 30, 1976. Total disbursements, therefore, will total US$9.55 million in the foreign exchange line. COLOMBIA: Loan 842 - Completion Report EXPORT COMPONENT Summary oVD2perations aIof Jukl2, 1976 Domestic Currency Operations Line Foreign Exchange Line No ~~~iount No Amount (in Col__'000) (in US$ '000) Total applications 49 500,456 30 16,651 Applications retired or rejected 23 362,066 12 6,417 Total Approvals 26 138,390 18 10,234 Total cancellations 3 2,185 10 1,092 Net comnitments 23 136,205 18 9,142 Total Disbursements 22 133,334 17 7,746 c Source: Banco de la Republic's Development Credit Department LCPDF, September 1976 tz1 COLOMBIA: Loan 842 7 Completion Report EXPORT COMPONENT Description oifT buIbpcts Approvals of ForegLxch&& Subl Intermediaries and their Employment Subprojects Amount Total in Sub- Total Amets (in $S'0O00) Enterprise Xgrojfl(o CoL illion Location eres Interest Date of Approval A. Finance Comipanica Corporacion Financiera de Valle .lMerosC 258.4 476 - 362.7 Mdellin 10 yra 19% 8 Feb 73 2.Ingenio Melendez 86.0 8¥ - 106.7 Cali 10 19 28 Jun 73 3.CurtieäEres Titan 232.0 - 42T 100 90,5 Yuibo 6 25 24 July 7:3 576.4 1 729 100 .9 8.4 21.4 Corporacion F. Valle & Cf Nacional - 4.Cementos del Valle 1,000.0 628 - 288.2 Yumbo 10 19 30 Aug 73 Cofiagro 5. Ingenio Risaralda _1_0o 1.0 Rarad7 R0 26 Sept 74 B. Commercial Bak Banco de Colombia 6.Fabricato 516.1 6,024 190 1,421.8 Bello 10 19 22 March 73 7.Thomas de la Rue 191.8 444 10 51.5 Bogota 10 19 17 May 73 8.Singer Sewing Machine 948.0 1,191 250 355.9 B/quilla 10 19 27 Sept. 73 1.65.9 7.659 450 652.8 10 19 Banco de Caldas 9.Distral S.A. 550.0 600 420 205.3 B/quilla 10 25 20 Nov. 75 Banco Comercio "" =" 10 2 10.Coltejer 12000.0 20C 511 2 889.1 Medellin 10 19 22 March 75 Banco Cafetero 11.Sedeco 446.1 - 126 596.5 Itagui 10 19 22 March 73 Batnco Construccion Desarrollo 12.Matadero del Llano 55.0 - - 4.4 Villavicencio3 19 12 kpril 73 Corporacion F. Nacional - 13.Textiles Rio Negro 628.7 1 104 293 273.1 Rionegro 10 19 1 March 73 Consorcio Bancos y Financieras "" 14.Peldar 1000.0 L550 561.7 Zipaquira 10 19 26 April 73 Bco. Comercial Antiogueno -2 15.Productos Grulla 124.3 1.236 - 122.3 Envigado 6 19 19 July 73 FNCB & Corporacion Occidente 16.Pepalfa 356.0 1 463 kl 149.9 Medellin 8 19 9 August 73 Corporacion Norte 17.Cemento Blanco 500.0 116 30 41.1 Medellin 6 19 4 October 73 0 Corporacion Colo~éia 18.Pavco 250.0 305 304.9 Bogota 7 25 27 Julio 75 - 9--------14 -4969. Source: Banco de la Republica'n Development Credit Department LCPDF, September 1976 ANNEX 11 - A.30 - COLOMBIA: Loan 842 - Comoletion Report EXPURT COMF,NENT Description of Subprojects Approvals of Domestic Currency Subloans Employment Total Assets Amount Sub of Inv. Enterp. Location of Terms Interest Date of irmediaries ., (e.1 $ 4114nn1 Totl Prjaect (Col S million) Suborolects (vrs) (%) Approval A. Financieras Corp. F. Norte 1. Slaconia 3.0 376 - 34.6 B/quilla 10 19 13 Sep '73 Corp. F. Valle 2. Polimero ColombianOs 9.0 476 19 362.7 Medellin 3 19 8 Feb '73 3. Ingral SA 9.0 556 - 415.1 B/quilla 10 19 26 April '73 4. Angel H. Castro td.-' 0.6 48 20 14.1 Falmira 3 i9 24 May '73 5. Guadualito Lda.-1 0.7 50 14 12.1 Palmira 3 19 24 May '73 6. Ingenio Melendez- 4.7 826 100 106.7 Cali 10 19 28 June '73 7. Loutdo i.3 - 40 6.5 Cali 3 A 28 June '73 8. Eugenio Castro Ltd. 0.2 - 16 20.5 Cali 3 19 12 July '73 9. Maderas y Chapas 2.5 750 - 167.9 Tumaco 10 19.0 14 Feb '74 A0. ini r 4 1li 5 23.5 74 Jul '75 30.0 3131 309 271.0 6.9 19.3 Subtotal Financieras 33 3507 309 246.4 7.2 19.3 B. Commercial Banks Banco de Colombia 11. Fabricato 22.4 6024 190 1421.8 Medellin 5 19 23 March '73 12. Petroquimica Colombians 20.0 192 - 236.8 Cartagena 5 19 9 August '73 13. Thomas de Is Rue 3.5 444 10 51.5 Bogota 10 19 17 May '73 14. Cia. Colombians Calzado 1.8 294 28 22.5 Medellin 8 19 30 August '73 15. singer Sewing Machine 1.3 1191 250 355.9 Barranquilla t 19 27 Sep 73 49.0 8145 478 760.6 5.6 19 Banco del Comercio 16. Monark 9.8 185 100 54.4 Cali 10 19 7 June '73 Banco Construccion Desarrollo 17. Matadero Llano 0.3 - 59 4.4 Villavicencio 3 19 12 April '73 18. Confecciones Blason 5.6 220 300 47.4 Bogota 5 19 24 May '73 19. Vertex Ltda. 1.4 - 35 3.0 Bogota 3 19 9 August '73 7.3 220 394 37.1 4.5 19 First National City Bank 20. Floramerica 2.0 830 - 39.1 Madrid 5.0 19 28 June '73 21. A. Johnson de Colombia 2.6 178 75 59.0 Bogota 5.0 19 31 Jan '74 4.6 1008 75 50.3 5.0 19 Banco Comercial Antioquefio 22. Products Grulla 3.6 1236 200 122.3 Medellin 4 19 19 July '73 23. Manuf. Ceramics 3.8S 330 716 53.8 medellin 10 19 27 Sept. '73 7.4 1566 270 87.1 7.1 19 Consorcio de Bancos y Finanzas 24. Peldar 16.0 1550 112 561.7 Zipaquirg 5 19 26 April '73 Banco de Bogota 25. Confec. Sead 3.0 125 110 11.3 Pereira 5 19 16 August '73 Aco. Celsia y Frances Italiano 26. Textfies Ego 8.2 610 85 80.4 Bogota 5 19 19 July '73 Subtotal Commercial Banks 105.3 13409 1630 461.8 5.86 19 Total 138.3 16916 1939 410.4 6.18 19.1 I/ This three subloans were fully cancelled. Source: Banco de la Republica's Development Credit Department LCPDF, September 1976 - A.31 - COLOMBIA: Loan 842 - Completion Report ANNEX 12 Distribution of Approved Loans by Size (As of March 31, 1976) (A) Doestic Currency Line - Amounta _N % Total Amums % (in $ Col million) (in $ Col '000) Up LU 1,UVU 2 8.7 71 U./. From 1,001 to 2,000 5 21.8 8.481 6.2 2,001 to 3,000 2 8.7 5,100 3.7 3,001 to 4,000 5 21.8 16,926 12.4 4,001 to 5,000 1 4.3 4,700 3.5 5,001 to 6,000 1 4.3 5,600 4.0 6,001 to 7,000 - - - 7,001 to 8,000 - - 8.001 to 9-00n 3 13.1 26.160 19.2 9,001 to 10,000 1 4.3 9.830 7.2 10,001 to 15,000 - - 15,001 to 2 ,0- 2 R7 36;000 70A More than 20,000 1 4.3 22,412 16.5 (5) Foregn Exchange Line imounta No. % Total Amounts % (in IIS$ '000) (in US$ '000) Up to 100 2 11.1 141 1.5 From 101 to 200 2 11.1 316 3.5 201 to 300 3 16.7 740 8.1 301 to 400 1 %A 356 3a 401 to 500 2 11.1 946 10.3 501 to 600 2 11.1 1,066 11.7 601 to 700 15.6 629 6.9 701 to 800 - - - - 801 to 900 - 27-8 -- 901 to 1,000 5 4,948 54.1 TOTAL 1B 100i AW142 100.0 COLOMBIA: Loan 842-CO Distribution of Approved Subloans. by Size of Subborrovers Total Assets (As of March 31, 1976) n-n.i Currancy Lin Pnrign Pr hangT in- TOTAL ASSETS Awons A..., (in $ Col.) No. % $ Col(000) % No. I US $ (000) Frmto I3UU,U I- I. I,,f, . - - - 3,000,001 " 7,000,000 1 4.3 292 0.2 1 7,000,001 " 11,000,000 - - - - - - - - 11,000,001 " 15,000,000 2 8.8 3,705 2.7 - - - - 15,000,001 " 20,000,000 - - - - - - - - 20,000,001 " 40,000,000 3 13.0 6,820 5.0 - - - - 40,000,001 " 60,000,000 5 21.8 25,316 18.6 2 11.1 692 7.6 60,000,001 " 80,000,000 - - - - 1 5.6 1,000 11.0 80,000,001 " 100,000,000 2 8.8 10.160 7.5 1 5.6 232 2.5 100,000,001 " 300,000,000 4 17.4 30,840 22.7 6 33.2 2,745 30.0 300,000,001 " 500,000,000 3 13.0 19,261 14.1 3 16.7 11456 15.9 500.000.001 " 700.000.000 1 4. 16.non 1107 2 11.1 1,446 i5.8 700000,001 and more 1 4.3 22412 16.5 2 11.1 1,516 16.6 Source: Banco de la Republica's Development Credit Department LCPDF, September 1976 - A.32 - ANNEX 13 COLOMBIA: Loan 842 - Completion Report EXPORT COMPONENT Disribucion of Approved Subloans by interest ana Grace reriode (As of March 31, 1976) Interest Rates Domestic Currency Line oreicn Exchano Linp No. % Amounts in % No. % Amounts in % $ Col '000 US $ '000 Up to 19.0% 22 95.7 134.206 98.5 14 77.8 7.110 77.8 From 19.1% to 20.0% - - - - 1 5.5 1.000 10.9 From 20.1% to 23.5Z 1 4.3 2.000 1.5 - - - - From 23.5% to 25.0% - - - - 3 16.7 1.032 11.3 TOTAL 23 100.0 136.206 100.0 18 100.0 9.142 100.0 Amounts in Amounts in Grace Periods No. x $ Col '000 % No. % US $ '000 2 0 years 5 21.7 29.970 22.0 2 11.1 753 8.2 1 year 7 30.4 37.304 27.4 3 16.7 927 10.1 1.5 years 1 4.3 3.000 2.2 - - - - 2 years 9 39.3 63.432 46.6 13 72.2 7.462 81.7 3 years 1 4.3 2.500 1.8 - - - - TOrML 23 100.0 136.206 100.0 18 100.0 9.142 100,0 COLONBIA: Loan 842-CO Distribution of Approved Subloans by Terms (As of March 31, 1976) Domestic Currency Line Foreign Exchange Line No. Amounts in % No. I Amunts in 2 Terms $ o1000 us $ '000 Up to 3 years 4 17.4 11.397 8.4 1 5.6 55 0.6 From 3.1 to 4 years 1 4.3 3.640 2.7 - - - From 4.1 to 5 years 10 43.6 84.772 62.2 - - - From 5.1 to 6 years - - - - 3 16.7 856 9.4 From 6.1 to 7 years - - - - 1 5.6 250 2.7 From 7.1 to 7 years 1 4.3 1.820 1.3 1 5.6 356 3.9 From 8.1 to 10 years 7 30.4 34.577 25.4 12 66.5 7.625 83.4 TOTAL 23 100.0 136.206 100.0 18 100.0 9.142 100.0 Source: Banco de la Republica's Development Credit Department LCPDF, September 1976 ANNEX 14 COLOMBIA: Loan 842 - Completion Report EAUR CUMUNENT Sub-Loan Distribution by Economic Activit and Location (As of March 31, 1976) Economic Activity Domestic Funds Line Frein Eange unds line No. % Amounts in % No. % Amounts in % ($ Cal 000) US$ (000) Agriculture 2 8.8 2.705 2.0 - - - - Food 3 13.0 13.992 10.3 3 16.7 1.141 12.5 Textiles 1 4.3 22.412 16.5 5 27.8 2.947 32.2 Shoe and Garments 6 26.2 25.220 18.5 1 5.5 124 1.4 Wnnd nrodiirra 1 4 2.500 1.8 - - - - Printing Industries 1 4.3 3.481 2.6 1 5.6 192 2.1 Leather 1 4.3 2.000 1.5 1 5.6 232 2.5 Ceias2 8.8 29.000 21.3 2 11.1 5085. Non-metallic Products 2 8.8 19.805 14.5 3 16.7 2.500 27.3 Basic Metallic Products 1 4.3 1.400 1.0 - - - - Metallic Products - - - - 1 5.5 550 6.0 Non-electric Machinery 1 4.3 2.600 1.9 - - - - F1ptric MAr,inpry 1 A 1.21 0.9 1 OQ in A Transport equipment 1 4.3 9.830 7.2 - - - - TOTAL 23 100.0 136.206 100.0 18 100.0 9.142 100.0 Destiny of Products No. % $ (000) % No. % US$ (000) % Exports 23 100.0 136.206 100.0 17 94.4 8.592 94.0 Tmport auhtitution and rnorts - - - - 1 5. 550 An TOTAL 23 100.0 136.206 100.0 18 100.0 9.142 100.0 COLOMBIA: Loan 842-CO Sub-Loan Distribution by Geographical Zones (as of March 31, 1976) Geographical Zone Domestic Funds Line Foreign Exchange Funds Line No. % Amounts in No. Amountsin % Le Col 000) (US$ 000) Antioquia 5 21.8 40.677 29.9 8 44.4 3.829 41.9 Atantico 3 13.0 13.261 9.7 2 11.1 1.498 16.4 Bolivar 1 4.3 20.000 14.7 - - - - Cuindin-mrca 7 30.5 301.24-1 . . 3, 167r.4 Meta 1 4.3 292 0.2 1 5.5 55 0.6 Narifio 1 4.3 2.500 1.8 - - - - Risaralda 1 4.3 3.000 2.2 1 5.6 1.000 10.9 Valle A 17 cZ 17 GIq 1I VL, 4-75 17251 3 16.7 1.318 14.4 TOTAL 23 100.0 136.206 100.0 18 100.0 9.142 100.0 Source: Banco de la Republica's Development Credit Department LCPDF, September 1976 COLOMBIA: Loan 842 - Completion Report EXO?ORT COMPONENT E12.pyment Generation by Economic Activity (As of March 31, 1976) Economic, Activity Total Value of Subprojects Total Employment Investment per Job (in $ Col '000) Generation (in $ Col '000) (in US $) Agriculture 8,500 14 607.1 22,487 Food Products 404,906 1,206 335.7 12,435 Textiles 506,618 1,200 422.2 15,636 Shoes and Garments 74,068 723 102.4 3,794 Wood Products 5,050 75 67.3 2,494 Printing, industries 9,866 10 986.6 36,541 Leather 20,000 100 200.0 7,407 Chemicals 130,222 19 6,853.8 253,840 1 Non-metallic Products 239,475 218 1,098.5 40,685 > Basic Metals 1,800 35 51.4 1,898 Metallic Products 263,206 420 626.7 23,211 Non-electric Machinery 11,100 75 148.0 5,481 Electric Machinery 45,093 250 180.4 6,680 Transport Equipment 000 100 240.0 88 TOTAL 1743,904 4 5 392.3 14,530 Source: Banco de la Republica's Development Credit Department LCPDF, September 1976 X- COLOMBIA:: Loan 842 - Corletion Report EXPORT COMPONENT Export Comuitments and Actual Exports (in US$'000) A. Subprojects that are AcconplisIng_ the Export Goals B. Subpro)ect; that are not Accomplishng the Export Goals Export Export Commitment Actual Exports Latest Forecast Commitment Actual Exports Latest Forecast in 5 Years in (N) Years of Exports in 5 in 5 Years in (N) Years of Exports in 5 Enterprise ofOeratn f Years O -eration Enterp e of Operation of Operation Years Operation 1. Ingenio Melendez 4,080 4,897(3) 8, 160 2. Ingral 62,560 47,952(3) 80,000 3. Polimeros Colombianos 5,291 4,673(3) 7,800 1. Friollanos 2,490 - 4. Fabricato 39,782 47,925(3) 79,875 2. Sedeco 3,000 - 5. Textiles Pepalfa 1,165 2,178(3) 3,600 3. Textiles Ego 700 - 6. Coltejer 92,452 84,579(3) 141,000 4. Textiles Rionegro 2,000 - 7. Slaconia 1,000 924(3) 1,540 5. Confecciones Blason 2,500 972(2) 1,300 8. Curtiembres Titan 5,300 3,102(3) 5,300 6. Confecciones Saad l,000 311(2) 780 9. Productos Grul1a 750 760(3) 1,270 7. Compania Col. Calzado 985 18(2) 60 10. Petroquimica Colombians 7,735 6,304(3) 10,500 B. Maderas Narino 3,000 - 11. Pavco 1,000 939(3) 1,565 9. Thomas de is Rue 2,595 1,129(3) 1,900 12. Peldar 12,953 14,688(3) 24,480 10. Vertex 125 18(3) 30 13. Manufacturas Ceramica 5,520 3,286(3) 5,520 11. Cemento Blanco 2,000 115(2) 360 14. Cementos del Valle 2,500 3,943(3) 6,600 12. Bicicletas Monark 7,914 66(3) 100 15. Floramerica 9,500 5,800(3) 9,800 13. Singer Sewing Machine 9,000 1,719(3) 3,000 16. A. Johnson 2,052 1,566(3) 2,610 14. Guadualito l,435 162(2) 400 17. Distral -1,000 1,313(2) 3300 15. Ingenio Risaralda 3,000 - Subtotal 254, 392920 Subtotal 41 ,744 lL30 INDEX 100 154 INDEX 100 19 Latest Forecast of SUMMARY: Exports in 5 Years of Number of Sub rojecta Expor: Commitments operation A. Subprojects accomplishing the Export Goals: 17 254,640 392,920 B. Subprojects not accomplishing the Export Goals: 15 _1 _ 0 TOTAL 32 2968 0 INDEX 100 135 Source: Banco de Is Republica's Development Credit Department and statistics from Colombia's Export Agency PROEXPO. LCPDF, September 1976 COLOMBIA: Loan 842 - Completion Report - A.36 ANNEX 17 EXPORT COMPONENT APPROVALS SCUIEDLF, I) IMPORTED FIXFD ASSETS (in US$) Y E A R S ,bclborrower 1973 1974 T o t a 1 Po i'meros Colombianos 258 ,402.04 - 258 ,402.04 extiles Ri.oeg,ro 628722.63 -- 628 ,722.63 Coletejer S,A. 1,000,000.00 - 1 000 000.00 Fabricato 5 A. 516,141.07 - 516 141.07 Manufacturas Sedeco S, A. 446,080.50 446 080.50 Motadero Frigorifico del Llano 55,000.00 -55 ,000.00 Cristaleria Peldar S.A 1,000,000 00 -1 000 000.00 Thomas de la Rue 191 777 07 191 777 07 Ingenio Melendez 86,018.42 - 86,018.42 Productos de Caucho Grulla S.A. 124,304.18 - 124 304.18 Textiles Pepalfa 356,047.18 - 356 ,047.18 Cementos del Valle S.A. 1.000,000.00 - - 1 ,000,000.00 Singer Sewing Machine 948,000.00 <-A9 000 00 Cemento Blanco S.A 500,000.00 - 500 000 .00 Ingenio Risaraldo SA. - 1 ,000,000.00 - 1 ,000,000.00 PAVCO S,A. - 5 000.00 250 000.00 Curtiembres Titán Ltda. - 232:000.00 232:000.00 Distral S.A. - - 550,000.00 550,000.00 T O T A L 7,110,493.09 1,000 ,000.00 1,032,000.00 9 142 493.09 I WORKINC CAPITAL (in S Co) 1973 1974 1975 TOTAL PolUmeros Colombianos 9, 000, 000.00 - - 9 000 000.00 Fabricato S.A. 20,700,000.00 - - 20:700:000.00 Cristaleria Peldar S.A. 16, 000, 000.00 - - 16 000 000.00 Thomas de la Rue 2, 946, 000.00 - - 2,946,000.00 Esteban Valencia - Conf. Blasón 5, 600, 000.00 - - 5 600 000.00 Fab. de Bicicletas Monark 9, 830, 000.00 - - 9.830.000.00 Ingenio Meléndez 4 700, 000.00 - - 4,700,000.00 Floramérica 2, 000,000.00 - - 2 000 000.00 Textiles Ego S.A. 8,160,000.00 - - 8 ,160 000.00 Productos de Caucho Grulla S.A. 3,520,000.00 - - 3 ,520 ,000.00 Petroquímica Colombiana S.A, 20,000,000.00 - - 20,000,000.00 Vertex Ltda. 1,400,000.00 - - 1 400 ,00000 Confecciones Saad 3 000 000.00 - - 3 000 000.00 Cia. Colombiana de Calzado 1,820,000.00 - - 1 '820 '000.00 Fr_;bric Slacona Ltda. 3.,000000.00 - - 3'000 000.00 A. Johnson de Colombia - 2,600,000.00 - 2,600,000.00 TOTAL 111,676,000.00 2, 600 000. 00 114, 276,000.00 IT)DOME=TICFIED ASSE-1S (inCo$ 1973 1974 1975 T o t a 1 Fabricato S.A.1 711 ,777.06 - 1, 711, 777.06 Matadero Frigorifico dei Liano 292,000.oo 292 ,M00-0n Ingral S.A. 9,000,000.oo - 94,00 ,000.oa Thomas de la Rue 535,000.oo - 535 ,000.oo Guadualito 705,271.89 Productos de Caucho Grulla S.A. 119,500.00 - 119 ,500.oo Singer Sewing Machine 1,261,000.oo - l ,261 ,000.oo Manufacturas de Cerámica S.A. 3,805,000.oo - 3 ,805 ,000. Maderas y Chapas de Nariño 2 ß00,000.oo - 2.,500 ,000.oo Curtiembres Titán Ltda. 2,000,000.oo 2,000,000.oo Total 17,429,548.95 2 ß00,000.oo 2, 000, 000.oo 21, 929, 548.95 Source: Banco de la Republica's Development Credit Department LCPDF, Septeiber 1976 Afl17' 18 - A.37 - ntvAT A:_ LoAn RM2_ - Cmnleti-on Report EXPOR COMPONENT Disbursement ScIWedule 1 ) IMPORTED FIXED ASSETS (n US $) Subborrowers 197 z 1973 1974 1975 Cemento Blanco de Colombia '473,000.0 26 415.I Cementos del Valle S.A. - 353,964.60 . Cia. de Productos de Caucho Grulla - - - 124 304.18 Colteier S.4. - 370, 658.90 629,341.10 - Cristaleria Peida, - 597, 523.79 395,557.70 6,918.5w Curtiembres Titán Ltda. Distral S. Fabricato S.A. - 214,683.94 301,457.13 Frigorifico del Llano - Frigollano - 55,000.oo lngenio Mléndez S.A. - 86 018.42 - - Ingenio Risoralda S.A. - 000 ,000.oo Manufacturas Sedeco S.A. - - - 446,080.50 Pisos de A-falto y Vínilo de Colombia S.A. --- Polimeros Colombianos S.A. - 117,940.76 140,461.28 - Singer Sewing Machine de Colombia - - 272,928.57 284,621.55 Textiles Pepolfu S.A. - 154,31148 195,047.50 Textiles Rionegro - 417, 422.37 211,300.26 - Thomas de la Rue de Colombia - 191 777 .07 - - 1,996,025.25 2,987,3z.i2 593,110.85 II) WORKING CAPITAL LOANS (in $ Col.) Subborrowers 1972 1973 1974 1975 A. Jhonson de Colombia S.A. - - 2 ,00,000.00 - Cia. de Producto- de Caucho Grulla - -- 3 ,20,000n.00 - Confecciones Soad - 1 ,454 ,700.00 1,545,300.00 - Esteban Valencia - Blasón - 3,300,000.00 2,300,000.00 Fruic, SaconIu Ltd. - 3J,000, 00.00 - Fabricato S.A. - 20 700 ,000.00 - Floramérica S.A. - - 2,000,000.00 ingenio Meléndez S.A. - 2710 ,634. 0 1,89,365.40- Monark S.A. - 9 ,830,000.00 - Peldar S.A. - - 16,000,000.00 - Petroquímica Colombiano S.A. - - 20, 000,000.00 - Polimeros Colombianos S.A. - 7 ,900 ,000.00 1,100,000.00 - Textiles Ego S.A. - 8,160,000.00 - Thomas de la Rus de Colombia - 2 ,946 ,000.00 - Vertex Ltda. - 1 400 ,0.00 Yanovich Kertzman y Cía. - Cia. Col. de Calzado - 1,820,000.00 - 50,241 334.60 64,034,665.40 III) 0OMESTIC FIXED ASSETS (n US $) Subborrowers 1973 1 974 1 975 Curtiembres Tit¿n Ltda. - - - Fabricato 45,516.80 19,957.18 3.469.29 Frigorifico del Llano- Frigollano - - 10 ,956.85 - Guadualito 27 483.75 - Ingral S.A. - - 302,304.10 Maderas y Chapas de Nariño S.A. - 47,149.72 Manufacturas de Cer¿mica S.A. - 142,776.74 - Singer Sewing Machine de Colombia - - Thomas de la Rue de Colombia - 6, 047.20 - 45,516.80 207,251.72 352 ,923.11 Source. Banco de la Republica's Development Credit Department LCPDF, September 1976 COLOMBIA: Loan 842 - Completion Report EXPORT COMPONENT Distribution of CommnIttEdLoans-n b nancial Intermediaries (As of March 31, 1976) .Doestnic Currency Lne Foreign Exch.ang japin Financial Intermediaries No. % Amounts in No. % Amounts % $ Col '000 in US $ '000) Domestic Private Banks 12 52.3 76,541 56.2 7 38.9 3,385 37.0 Public and Semi-Public Banks - - - - 1 5.6 446 4.9 Foreign Private Banks 2 8.7 4,600 3.4 - - - Pool of Banks 1 4.3 8,160 6.0 - - - - Financing Companies 7 '30.4 30,905 22.7 7 38.9 2,955 32.3 Pool of Finance Coinpanies - - - - i 5.5 2,--- 10.9 Pool of Banks and Finance Cos. 1 4.3 16 000 11.7 2 11.1 1,356 14.9 TOTAL 23 100.0 16 206 100.0 18 100.0 9,1 100.0 Source: Banco de la Republica's Development Credit Department LCPDF, September 1976 COLOMB LA: Loan 842 - Completion Report EXPORT COMPONENT Characteristics of Subprojects by Intermediaries Average Assets Average Average Subloans Amount Employment & Enterprises Terms Interest Financial Intermediaries (in_US $ '000) Number Enterprise Sub rojects (in Col $ million) jyr) (A) Foreign Exchange Line Finance Companies 2,955 7 3,882 423 230.6 8.75 20 Commercial Banks 5,187 10 24,508 2,184 959.9 9.74 19.6 Agricultural Bank 1 00 1 1,047 1,047 63.0 10.00 20.0 Sub-total 9 2Z18 289 3, 626.1 9.42 19.8 Average Assets of Average Avcrage Subloans Amount Emiloyment Enterprises Terms Interest (B) Domestic Currency Line (in Col $ million) Number Enterprise Subprojects (in Col $ million) (Yrs) j Finance Companies 32.3 10 3.507 309 246.4 7.20 19.3 Comnercial Banks 103.9 16 13,409 1,630 461.8 5.90 19.0 Sub-total 136.2 26 16,916 1 410.4 6.20 19.1 Source: Banco de la Republica's Development Credit Department LCPDF, September 1976 - A.40 - ANNEX 21 COLOMBIA: Loan 842- Completion Report EXPORT COMPONENT Staff of Development Credit Department 1972 1973 1974 1975 Director 1 1 1 1 Assistant Directors 2 2 2 2 DivisinChief 4 4 4 Analysts 17 21 18 16 Economists 2 3 3 3 Acutns2 22 Acc. Auxiliaries 4 8 5 7 C 4-*4- 4- 4 ns 1 QMau 12 2 Secretaries, Files, Others 15 15 19 15 Total 51 60 60 55