Andean Development Bank Plans $300 Million Loan for Colombia

Bogota, May 13 (<a href=quote.bloomberg.com>Bloomberg) -- The Andean Development Corp., a regional multilateral lender, plans to disburse a $300 million loan for Colombia by July to help fund state cutbacks and social spending, President Alvaro Uribe's office said.

Enrique Garcia, president of the development bank, said the bank planned to disburse as much as $800 million to Colombia this year to spur economic growth, generate jobs and boost export competitiveness, according to the presidential Web site.

The CAF, as the bank is known, has agreed to provide Colombia with $3.5 billion in loans and loan guarantees over the next four years to close the budget deficit and boost growth. Garcia said the funds would also help finance state cutbacks, spending on the poor and plans to boost exports.

``We want to motivate companies so they take advantage of the new Andean Trade Preferences Act that will be in effect until 2006,'' Garcia was quoted as saying.

The U.S. last year renewed and broadened trade benefits for a range of Colombian exports, including canned tuna and shoes, to help generate legal alternatives to drug crop production.

The CAF last year approved $748 million in loans for Colombia, of which $83 million served as a partial guarantee of a $250 million syndicated loan, the agency said in December.

The corporation approved $705 million for Venezuela, $500 million in lending for Bolivia, $497 million for Peru, $400 million for Ecuador, $110 million for Brazil and $25 million for Uruguay last year.

The development corporation, set up in 1970, serves as a lending agency for Bolivia, Ecuador, Colombia, Venezuela and Peru. Members now also include Argentina, Brazil, Chile, Costa Rica, Jamaica, Mexico, Paraguay, Spain, Trinidad and Tobago and Uruguay.