finance

CAF may fund locks

LA PRENSA

canal cash:A regional agency may fund part of the expansion.1027494

The Corporación Andina de Fomento (CAF) has submitted a proposal to Panamanian authorities to participate in the funding for the construction of the third set of locks.

This was confirmed by Enrique García, executive chairman of the multilateral agency. "We are looking at ways to support the country in a project that is vital not only for Panamanians, but for the entire region," García said from a meeting of the agency in Lima, Peru. He declined to provide specifics about CAF's proposal.

Panama is one of 17 countries that holds shares in the financial institution which supports sustainable development and regional integration. It also includes a number of banks in South America.

Panama currently owes $61 million to the agency, but that is expected to grow to $91 million when the country receives a loan that will be used to upgrade the public transportation system.

The Panama Canal expansion, of which the construction of the third set of locks is the largest component, is expected to cost $5.25 billion.

The CAF is also looking at opening an office in Panama and expanding the country's role in the organization.

"Panama has been a member of the CAF for several years and we are making progress in negotiations for it to become a full partner," García said.

The agency is headquartered in Caracas, Venezuela and has offices in La Paz, Bogotá, Quito and Lima. García praised Panama's economic performance that, according to statistics, was the fastest growing in Central America in 2007. The country has registered budget surpluses the past two years and its public debt has fallen in comparison to the gross domestic product by nearly 20 percent since 2004.

"We are very excited about everything that is happening there," García said.