Contacts: Gabriela Aguilar (5255) 5480-4200 Gaguilar2@worldbank.org Alejandra Viveros (202) 473-4306 Aviveros@worldbank.org WASHINGTON, October 27, 2005 — The World Bank’s Board of Directors today approved two loans for a total of $257 million for Colombia to promote business productivity and investment, as well as to support sustainable development. The $250 million First Programmatic Business Productivity and Efficiency Loan seeks to increase business productivity and investment levels in Colombia by facilitating the creation and operation of businesses, and improving their access to finance, through a stronger financial system and capital markets. Specifically, this loan will support policy and institutional reforms in three areas: · Enhancement of the business environment to promote investment and trade and improve competitiveness of the productive sectors of the economy. · Increase the soundness and depth of the financial system. · Expansion of access to capital markets by businesses and improvement of efficiency of financial secondary markets. “We will support Colombia’s efforts to strengthen economic growth and poverty alleviation through a more dynamic private sector,” said Isabel Guerrero, World Bank Country Director for Colombia and Mexico. “Improving the investment climate will help businesses thrive by reducing the costs of joining the formal sector.” The $250 million, fixed-spread loan is repayable in 17.5 years, including a 5.5-year grace period. This loan is the first part of a three-phase programmatic development policy operation that would be executed over a period of three years. Sustainable Development Investment Project The $7 million Sustainable Development Investment Project will help alleviate the effects of environmental degradation on the most vulnerable segments of the Colombian population -particularly children- through improvements in public health and quality of life. The project will support the reduction of air and water pollution, as well as improve hygiene and urban environmental management. In particular, the project will support the following activities: - Incorporation of environmental considerations in the policies of the sectors that result in a high cost of environmental degradation, such as health, transport, and water;
- Implementation of policy measures for integrated water resource management;
- Optimization of urban development policy instruments to improve urban quality of life; and
- Strengthening of the planning, monitoring, and oversight of national, regional, and local environmental management and policies.
“This project not only exploits the synergies between economic growth and environmental management, but it also supports Colombia’s efforts in moving toward the achievement of the Millennium Development Goals,” added Guerrero. The project will be implemented over a four-year period in parallel with the Development Policy Loan Program for Sustainable Development, which comprises three operations and seeks to protect the environment in Colombia by integrating the principles of sustainable development into country policies and programs. The first operation in the program, for $150 million, was approved by the World Bank’s Board of Directors last June. The $7 million, fixed spread loan is repayable in 11.5 years, including an 11-year grace period.
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