Announcement of Exim Bank of Japan Signs First Untied Co-financing Agreement with World Bank to Assist Colombian Oil Project on August 26, 1986

FOR IMMEDIATE RELEASE . World Bank 1818 H Street, N.W ., Wash ington, D.C. 20433 , U.S.A. BANK NEWS RELEASE Contact: Ciro Gamarra (202) 477-5320 EXIM BANK OF JAPAN SIGNS FIRST UNTIED COFINANCING AGREEMENT WITH WORLD BANK TO ASSIST COLOMBIAN OIL PROJECT WASHINGTON, August 26 -- The Export-Import (EXIM) Bank of Japan today signed a cofinancing agreement for Y 13,328 million ($80 million) with the World Bank to assist a petroleum project of Colombia's national oil company, Empresa Colombiana de Petroleos (ECOPETROL). The cofinancing agreement was signed at the World Bank's headquarters in Washington, D.C. by Mr. Makoto Sunagawa, Chief Representative of Japan's EXIM Bank, and Mr. A. David Knox, Regional Vice President for Latin America and the Caribbean of the World Bank. The signing of a loan agreement between EXIM Bank and Colombia also took place today in Tokyo. The cofinancing agreement includes 15 Japanese commercial banks led by EXIM Bank. The loan will be repaid in 20 equal semi-annual consecutive installments starting March 1989 and the interest will be the Long Term Prime Rate in Japan at the time of each disbursement. This is the first cofinancing agreement between the EXIM Bank of Japan and the World Bank not tied to Japanese exports, a model which EXIM Bank and the World Bank hope can be replicated in other developing countries in the future. The World Bank granted a $130 million loan to ECOPETROL on November 6, 1984 in support of ECOPETROL's investment program, which has an estimated total cost of $980 million, and included among other things, the development of the Cano Limon oilfield, and the Casabe secondary recovery project. Development of the Cano Limon field started in September 1984 as a joint project between ECOPETROL and Occidental de Colombia, a venture later joined by Shell Oil. Continued exploration activities proved the field's recoverable reserves to be far larger than originally expected making it the largest in Colombia. As a result, it became evident that additional investments in field development would be needed. These have been estimated to cost $453 million. The EXIM Bank loan is being provided in order to complete the financing of these investments. Additionally, a portion of a $1 billion "jumbo" loan package secured last year by the Colombian government will be used to finance this project. The development of the Cano Limon field has become an important element in Colombia's medium-term economic adjustment program and will permit Colombia to diversify its exports. NOTE: Money figures are expressed . in U.S. dollar equivalents.