Announcement of World Bank Supports Municipal Development in Colombia on May 31, 1991

FOR IMMEDIATE RELEASEr World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. BANK NEWS RELEASE NO. 911 83LAC Contact: Ciro Gamarra (202) 473-8721 WORLD BANK SUPPORTS MUNICIPAL DEVELOPMENT IN COLOMBIA WASHINGTON, D.C., May 31, 1991 -- Colombia's program to improve municipal institutions will be assisted by a World Bank loan of $60 million. The municipal development project will help provide better services to over 5 million people, most of them poor. The project includes a line of credit administered by the Financiera de Desarrollo Territorial (FINDETER) to finance about 300 subprojects to improve urban infrastructure and strengthen local governments. The subprojects to improve urban infrastructure will include streets, bus terminals, solid waste management, slum upgrading, market places, health posts, slaughterhouses, river wharves, and local telephone networks. A program to strengthen FINDETER and develop its lending pipeline as well as a program to update cadastral surveys nationwide are also part of the project. The development of sector training agencies and the delivery of a training program to about 6,400 sector personnel will also be included. The project is expected to have a positive economic effect on a large number of cities and on their hinterlands by addressing infrastructure bottlenecks. It will also bring benefits by promoting the execution of more cost-effective investments, better maintenance of capital assets, and a higher self-reliance by local governments on local resource mobilization. A positive environmental impact will be achieved through the implementation of sound solid-waste disposal in participating municipalities. The total cost of the project is estimated at $188 million. Other financing will be provided by local governments ($47.5 million), financial intermediaries ($16.6 million), FINDETER ($14.1 million), the Government of Colombia ($5.3 million) and regional planning councils (CORPES, $700,000). The Inter-American Development Bank is expected to provide a cofinancing loan of $44 million. The World Bank loan, to be disbursed over six years, was made to the Republic of Colombia. It is for 17 years, including five years of grace, with a variable interest rate, currently at 7.73.percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.25 percent on the undisbursed balance. NOTE: Money figures are expressed in U.S. dollar equivalents.