Announcement of a World Bank Loan to Help Colombia Improve Public Financial Management on December 9, 1993

, MEDIATE RELEASE World Bank 1818 H Street, V., Washington, D.C. 20433, U.S.A.* Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 94/ 36 Contact: Ciro Gamarra (202) 473-8721 COLOMBIA TO IMPROVE PUBLIC FINANCIAL MANAGEMENT WASHINGTON, D.C., December 9, 1993- The World Bank has approved a $30 million loan to Colombia to help finance a project to improve the management of public finances in the country, from revenue generation to the evaluation of public policies. The $58 million project includes defining, institutionalizing, and implementing accountability principles and procedures in key national entities and in pilot departmental and municipal entities over a seven-year period. The project will help design an integrated information system to modernize resource mobilization, macroprogramming, expenditures control management, government management control and public policy evaluation and institutional strengthening. In addition, the project will help prepare the corresponding norms, regulations, procedures and related manuals. It will also help install these procedures with the required physical and intellectual capabilities in key selected national entities. Improvement of the public financial management is crucial to modernize all other aspects of the public administration in Colombia. Overall, public revenues could be increased by as much as 30 percent by the year 2000 through both increased tax collection and enhanced efficiency of public resource programming and spending. The Government of Colombia will finance the remaning $28 million of project cost. The World Bank loan will be disbursed over six years. The Ministry of Finance, the National Planning Department, and the Comptroller General's Office will be responsible for project implementation. The World Bank loan to the Republic of Colombia is for 20 years, including five years of grace, with a variable interest rate, currently 7.43 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.