Announcement of World Bank Loans for Almost Two Billion to Colombia Since 1949 on September 14, 1978

. 1d 1::tzl HOLD FOR RELEASE · ... 903 •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 For Publication Thursday, September 14, 1978 WORLD BANK LOANS FOR ALMOST $2 BILLION TO COLOMBIA SINCE 1949 In FY1978 the Bank provided a record $354.6 million for seven projects The World Bank continued its support to a wide range of development programs in Colombia in FY1978 with loan commitments reaching a record level. The Bank approved seven long-term loans total ling $354.6 million, an increase of $73.6 million or more than 25% over the previous year. The Bank's 1978 Annual Report said lending included the first loans for nutrition improvement and for urban development in Colombia. Other loans were for water supply and sewerage, power generation and transmission, • and industrial development. The seven projects assisted by the Bank will require total investments of about $900 million by the Colombian government • Since it began operations in Colombia in 1949, the Bank has approved a total of 74 loans amo~nting to $1,951.4 million (including this year's commitments). Of this total, $1,931.9 are Bank loans and $19.5 million account for one International Development Association (IDA) credit. Colombia is the third largest World Bank borrower in Latin America, and the sixth in the world, after Brazil, Mexico, India, Korea, and Yugoslaviao Since 1968, Bank lending in Colombia has become more diversified and has been concentrated on productive activities with social as well as economic benefits. The projects for nutrition improvement, urban development, and water supply supported this year are principally designed to improve the standard of living of the poorest people. The objectives of this year's Bank-assisted projects are summarized as fol lows: Nutrition improvement The $25 million loan will assist Colombia in combating widespread malnutrition among the poorest 30 percent of the population. The project will be implemented in seven of the country's 22 departments and in the district of Bogota, which represent two major heavily populated regions with a high con- centration of Colombia's poorest. • • •• ! NOTE: Money figures are expressed in U.S. dollar equivalents.  ' • - 2 - The project's total cost will be $68.9 million. The project includes construction or reconstruction of 281 health posts, provision of potable water for about 372 rural communities, installation of 112,000 household latrines, promotion of about 20,000 family gardens and 100 school demonstration gardens, and studies related to the manufacturing, processing, storage and marketing of nutritious foods. About 1.8 million people, 70% of them in rural areas, are expected to benefit from the project. It is anticipated that the project will reduce by 20% the absenteeism from work caused by sickness and reduce the infant mortality rate by 25% in these areas. The project, apart from improving nutrition, is expected also to raise living standards and productive capacity. Water Supply and Sewerage The World Bank is helping finance the Second Cali Water Supply and Sewerage Project with a loan of $13.8 million. The project, with an estimated total cost of $42.9 million, aims at improving the living conditions in Cali, the third largest city of Colombia. The project is expected to benefit directly about 250,000 people, most of them earning less than $150 per capita per year. In addition, about 160,000 people will benefit through house connections. The project includes the reduc- tion of contamination levels of the Cauca River, at present about 500 times • higher than acceptable standards. Urban Development The first urban development project supported by the World Bank in Colombia is expected to benefit about 550,000 people, most of them poor, in 23 cities throughout the country. A $24.8 million loan was approved for the project, which has an estimated total cost of $62 million. The project includes construction of 27 community development centers, extension of primary education to about 95% of the eligible population, provision of health and nutrition services, and promotion of community enterprises~and credit. Some 26,000 people will benefit from vocational training and promotion of cooperatives, and about 3,800 new jobs will be created. Power Generation A $126 million World Bank loan supports the S~n Carlos Hydro Power Project, aimed at providing about 15% of the additional capacity required by the country in the edrly 1980s. The project will comprise the first stage of the San Carlos hydroelectric complex, with an installed capacity of 620 megawatts. The project forms part of the lnterconexion Electrica SeAe (ISA) 's expansion program for 1978-1982, that will require a total investment of $421.3 million. The project includes the construction of a 70-meter high earth dam on the Guatape River, inlet and discharge tunnels, and an underground power station • • ... / • - 3 - Power Interconnection The World Bank is also helping finance an Interconnection Project that will link the hydro-based Central System with the thermal-based Atlantic Coast System. The project includes the construction of a single circuit, 523-kilometer long, 500 kilovolt transmission .1 ine between the San Carl0!5 substation and Sabanalarga, near the Atlantic coast. The project wi 11 1 ink the country's major power systems. It wi 11 result in more economical development and operation of the national power system. It will also contribute to fuel savings of about $1.3 billion (at 1976 prices) over the life of the project. Export Processing Zone An industrial export processing zone will be established in Cartagena, on the Colombian Atlantic coast, with the World Bank's assistance. The Bank approved a $15 million loan to help finance the project, the first of this type in Latin America. The project, with estimated total cost of $31.3 million, aims at in- creasing and diversifying Colombian exports. About 38 hectares of swamps will be transformed to establish an estimated 30 export-oriented industries. The • project will comprise the first five-year stage of a 92-hectare export processing zone to be built in 12 years. Industrial Development Industrial development in Colombia will be supported by a $100 million World Bank loan to Banco de la Republica, Colombia's Central Bank, which will rel~nd to private development finance companies to assist some 200 industrial projects. This will be the seventh loan for industrial development in Colombia. The: loan will help. promote exports and regional decentralization, and will help finance medium- and small- size enterprises~ The projects are expected to help create about 13,000 additional jobs and to generate exports valued at about $150 mi 11 ion annual l y. The World Bank's 1978 Annual Report said that 11 a major effort has been under way during the last three years to study the special problems of the small-scale enterprises and of labor-intensive activities" in Colombia and other countries. The Report mentioned the success of two Bank loans to Colombia's Corporacion Financiera Popular in FY75 and FY77 devoted exclusively to small- scale enterprise financing. The Report added that 11 the results were so encouraging that a second loan to the same institution was approved in fiscal year 1977. 11 • - 0 -  - 4 - WORLD BANK/IDA LENDING TO COLOMBIA • (To June 30, 1978) BANK LOANS I DA CREDI TS BANK/IDA TOTAL SECTOR No. Original No. Original No. Original Amount Amount Amount ( Round figures, in mi 11 ions of us do 11 a rs) Ag r i cu 1tu re and 12 $ 240.6 $ - 12 $ 240.6. Rural Development Education 3 35.3 3 35.3 Industry 11 408.0 11 408.0 Non·-project Nutrition Power 2 20 68.o 25.0 526. 1 2 20 68.o 25.0 526.1 • Telecommunications 4 106.0 4 106.0 Transportation 13 32507 ( 1) 19.5 13 345.2 Urban Development 24.8 24.8 Water Supply 7 172 0 !~ 7 172.4 TOTAL 74 $1,931.9 ( 1) $19.5 74 $1,951.4 Note: Joint Bank/I DA operations are counted only once, as Bank opeiations. •