CAF to loan Ecuador $100 million for economic plan

www.forbes.com Reuters, 03.11.03, 1:08 PM ET CARACAS, Venezuela, March 11 (Reuters) - The Andean Development Corporation (CAF) approved on Tuesday a $100 million loan for Ecuador in the latest sign that its new government has won approval from multilateral lenders for its economic austerity program. The CAF, which is the regional financing arm of South America's Andean nations, said the 10-year-loan would have two years of grace. The International Monetary Fund has praised the economic policies of the new government of President Lucio Gutierrez who took office on Jan. 15. The IMF is expected to soon loan Ecuador around $200 million. The Andean nation has cut back on spending and frozen some wages in an effort to secure the loan which it needs to help pay close to $1.5 billion in debt principal in 2003. Ecuador is seen as strapped for cash after departing President Gustavo Noboa spent a windfall from high oil prices by boosting public-sector wages and leaving some $722 million in unpaid bills for the next administration. About 18 percent of CAF's loan portfolios are with Ecuador.