Announcement of the World Bank Supports Telecommunications and Small-Scale Industry Projects in Colombia on June 9, 1977

t -World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 Bank News Release No.77/125 June 9, 1977 THE WORLD BANK SUPPORTS TELECOMMUNICATIONS AND SMALL-SCALE INDUSTRY PROJECTS IN COLOMBIA The World Bank today announced the approval of two loans totaling $75 mil lion to help finance the expa~1sion of the telecommunication system and investments in small-scale industrial enterprises in Colombia. The first loan -- $60 mill ion to the Empresa Nacional de Telecomunicaciones (TELECOM) -- will support the Fourth Telecommunications Projects in Colombia. A second loan -- $15 mill ion to the Banco de la Repubiica -- will provide term financing to 600-750 small-scale industrial enterprises • • Fourth Telecommunications Project The Fourth Telecommunications Project supported by the World Bank in Colombia will provide the expansion of exchange facilities primarily in small towns and rural areas by 95,000 lines and the connection of about 75,000 additional subscribers. ~ This project with a total cost of $167.7 million -- will consist also of the installation of microwave radio and multiplex equipment to increase circuit capacity by about 8,800 internal long distance circuits and the connection of about 2,200 rural communities to the network. The $60 million loan to TELECOM, with the guarantee of the Republic of Colombia, will have a term of 17 years, including a grace period of 3-1/2 years, and an interest at 8.2 percent per annum. The lnteramerican Development Bank (IDB) will also participate in the financing • plan of this project with a $29 million loan. The First Pacific Bank of Chicago and the Riggs ~Jational Piank of '·'ashinqton, n.c. are also partic.ipating in the telecommunications loan. • • • I NOTE: Money figures are expressed in US dollar equivalents  - 2 - S~cond Small-Scale Industry Project •' The Second Small-Scale lnd~stry Project supported by the Bank will provide credit to a group that has been generally denied access to term financing, help develop local management capacity and contribute to the broadening of business ownership in Colombia. The project will support a progr~m costing approximately $42 million equivalent of investments in small- and medium-scale enterprises over the next 2-1/2 to] years. It is expected this project will create directly and ;ndirectly some 4,000-5,500 new jobs. The $15 million loan to the Banco de la Republica will have a fixed term o f . 15 years, including 3-1/2 years of grace, with interest at 8.2 percent per annum. The proceeds of the loan wi 11 be relent to the Corporacion Financiera Popular (CFP) at 17 percent and 18.5 percent per annum. • FORM NO. 1121 t. (5-76) T EC HN I CAL DA T A PROJECT: Fourth Telecommunications COUNTRY: Colombia TOTAL COST: $ 167 • 7 mi 1 1 i on BANK FI NANC I NG : $60 million for a term of 17 years, including a grace period of 3-1/2 years, with interest at 8.2% per annum. OTHER FINANCING: lnteramerican Development Bank(IDB): )29.0 million Empresa Nacional de Telecomwnicaciones (TELECOM): $78.7 million IMPLEMENTING ORtANIZATION: EMpresa Nacional de Telecomunicaciones (TELECOM). Calle 23, No. 13~49, Bogoti, Colombia. PROJECT DESCRIPTION: The project will provide for: a) Expansion of exchange facilities primarily in provincial and rural areas by 95,000 1 ines and the connection of about 75,000 additional subscribers; b) installation of micro- wave radio and multiplex equipment to increase circuit capacity by about 8,800 long dis- • tance circuits; and c) connection of about 2,200 rural communities to the telephone network. PROCU.REMENT: A11 goods provided under the p reject .for Bank fi na~c i ng wi 11 be procured through international competitive bidding, in accordance with Bank guidelines. All imported goods provided under the project for IDB financing wi 11 be procured through international competitive bidding according to IDB guide- lines. Other imported goods to be financed by TELECOM would be procured by negotiations with suppliers and through competitive bidding. Goods such as cables, cable ducts, poles and fittings, which will be financed by IDB and TELECOM and are manufactured locally wi 11 be procured from domestic sources through competitive bidding • • ECONOMIC RATE OF RETURN: 19% ESTIMATED COMPLETION DATE: 1980 - 0 - FORM NO. 1121 (5-76) T ECHN I CAL DA T A PROJECT: Second Small-Scale Industry COUNTRY: Colombia TOTAL COST: BANK FI NANC I NG : $15 million at a fixed term of 15 years, including 3-1/2 years of grace, with interest at 8.2% per annum~ OTHER FINANCING: Corporacion Financiera Popular (CFP): $10 million Other financial intermediaries: $7 million Sub-borrower's own funds: $10 million IMPLEMENTING ORGANIZATION: Corporacion Financiera Popular (CFP). Calle 28, No. 13-A-53, Pisa 15, Bogota, Colombia. PROJECT DESCRIPTION: The project will provide term financing to 600-750 small- scale industrial enterprises to carry out necessary invest- ments resulting from effective expansion, renovation, or relocation of their installed productive capacity. The project wi 11 also allow for the hiring of consultants needed by CFP and/or its clients. In view of the unsatisfied needs of smaller firms, at least. 50% of the proceeds of the loan wi 11 be channeled to industrial enterprises with total assets below $300,000 equivalent~ PROCU.REMENT: As usual under DFC-type projects there would be no inter- national competitive bidding. Most capital goods will be purchased "off-the shelf" from domestic distributors. Construction of industrial buildings will be by domestic firms. CONSULTANTS: Colombian consultants wi 11 principally be u:ilized for technfcal assistance to CFP and its clients. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: Over 20% 1980 - 0 - •