Announcement of Sixty Million US Dollars Loan for Industrial Development in Colombia on June 4, 1973

INTERNATIONAL BANK FOR • RECONSTRUCTION AND DEVELOPMENT 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE'.: EXECUTIVE 3-6360 Bank. Press Release No. 73/36 Subject: $60.0 ~illion loan for industrial June 4, 1973 development in Colombia The World Bank has approved a $60.0 million loan to assist Colombian industrial de'V8lopment by providing funds for up to eight private development finance companies (financieras) to relend to industry. The loan is the fifth made to Banco de la Republica for use by the financieras. Five of them have participated in earlier Bank loans: Corporacion Financiera Colombiana, of Bogota; Corporacion Financiera Nacional, Corporacion Financiera de Caldas, of Ma.nizales; of Medellin;/Corporacion Financiera del Valle, of Cali; and Corporacion Financiera del Norte, of Barranquilla. Three additional financieras may pa1- • licipate for the first time in a Bank loan: Corporacion Financiera de Occidente, of Pereira, which has already qualified; and Corporaction Financiera de Santander, of Bucaramanga, and Corporacion Financiera del Caribe, of Bogota, which both still have to qualify. The Colombian private financieras account for a substantial part of institutional medium and long-term finance for private industrial investment in Colombia. Four previous Bank loans, totaling $102.5 million and made in 1966, 1968, 1969 and 1971, have been fully conmitted by the participating financieras. The new loan will help the companies to eliminate the backlog of projects awaiting financing and funds are expected to be ccamitted by mid-1975. The Bank loan will cover direct foreign exchange requirements of projects • to which the financieras commit funds. Of the $60.0 million, half will be allocated as follows: $3 million to each of the five financieras that have /more Bank P.R. No. 73/36 -- Colombia -- industrial development - 2 - • participated in previous Bank loans; $1 million to each of the three new financieras th~t have qualified; and $10 million and $2 million, respectively, to the five and the three financieras for use ~y any of them which has used up its ~!location. The remaining $30 million will constitute a "common pool" for use by any financ.iera, but only after the participating companies have mobilized an additional $250 million Colombian pesos through bond and share placements. The loan will be guaranteed by the Government of Colombia. Interest will be at an annual rate of 7~%. Reimbursements to the World Bank will conform approximately to repayments received by the financieras on their Bank-financed sub-loans, which are repayable over periods of up to 15 years. ~ - 0 - •