Announcement of World Bank Supports Project to Increase and Diversify Exports in Colombia on June 15, 1978

FOR JMMEDJATE RELEASE •NorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 78/112 J UN E 15 , 19 78 WORLD BANK SUPPORTS PROJECT TO INCREASE AND DIVERSIFY EXPORTS IN COLOMBIA The World Bank announced today the approval of a $15 million loan to help finance a project for the establishment of an industrial export processing zone in Cartagena, Colombia. The project will be the first Bank- supported project of this type in Latin America. The Cartagena project, which aims at increasing and diversifying Colombia's exports, will transform 38 hectares (ha) of swamp and undeveloped land into an area suitable for establishing an estimated 30 export-oriented industries. It will comprise the first 5-year stage of a 92-ha export processing zone to be built over a 12-year period. Total project costs are estimated at $31.3 mill ion. Through increased foreign exchange earnings, the project wi 11 help to reduce the country's dependence on coffee exports. Simultaneously, it will promote industrial growth and thereby employment in a relatively unde- veloped region, with one of the highest rates of unemployment in Colombia. The project will also complement Bank-financed efforts to improve public utility services as well as a proposed urban poverty program in the Cartagena area. The project is expected to result in the net inflow to Colombia of an estimated $50 million (in 1977 prices) annually in the form of rent, taxes, wages and purchases. An estimated 6,000 jobs will be created in the zone, which will increase manufacturing employment in the Cartagena area by more than 50%. The $15 million loan to the Republic of Colombia will have a term of 17 years, including 4 years of grace, with interest at 7.5% per annum. The project will complement past lending in the industrial sector in Colombia. Since 1966, the World Bank has made eight loans totalling $263 million to Banco de la Republica, Colombia's Central eank, for on-lending to industries through private and public Colombian development finance companies. • NOTE: Money figures are expressed in U.S. dollar equivalents • FORM NO. 1121 (5-76) T E CHN I CA L D A T A PROJECT: COUNTRY: TOTAL COST: Cartagena Industrial Export Processing Zone Colombia $31 .. 3 mi 11 ion • BANK FINANCING: $15 million for a term of 17 years, including 4 years of grace, with interest at 7.5% per annum. OTHER FINANCING: Government of Colombia, $4.2 million Implementing Agencies, $7.4 million Internal Borrowing, $4.7 million IMPLEMENTING ORGANIZATION: i) Zona Franca Industrial y Comercial de Cartagena (ZFIC) Calle 29, No. 27-05, Cartagena, Colombia i i ) Empresas PGblicas Municipales de Cartagena (EPMC) . La Matuna, Edificio EE. PP. MM., Cartagena, Colombia i i i ) Servicio Nacional de Aprendizaje (SENA) Carrera 14, No. 13-88, Bogota, D.E., Colombia PROJECT DESCRIPTION: It consists of: (a) the development of 38 hectares of land and construction of buildings and auxiliary infrastructur~ for industry; (b) construction of a power distribution 1 ine for the project site; (c)-..._.., technical assistance for international promotion; (d) rehabilitation and widening of a road from the project site to the port connecting highway; (e) construction of a water transmission main from an existing treatment plant; and (f) construction and equipping of a small training center. PROCU.REMENT: Contracts with an estimated cost above $100,000 for equipment and $1,000,000 for civil works will be subject to international competitive bidding (ICB) in accordance with Bank guidelines. Procurement below the ICB limit will take place according to local procedures. Civil works up to an aggregate cost of $400,000 or about 2% of total works may be carried out by forre account. The Bank will review ex ante all tender documents above $25,000 for equipment, and $125,000 for civil works. The Bank will review ex ante awards for those contracts subject to ICB, and will review all contracts proposed for Bank financing prior to authorizing disbursements. CONSULTANTS: The project wil 1 provide about four man-years of technical assistance for the carrying out of an international promotion campaign. ECONOMIC RATE OF RETURN: EST IMATED COMP LET ION DATE: 1983 - 0 - •