DFC II

closed

The Second Development Finance Companies Project will assist in financing industrial development in Ecuador and will enable CV-CFN and COFIEC to cover the foreign exchange costs of specific investment projects. Comparing the projected operations of CV-CFN and COFIEC with their expected resources, they will need $20 million equivalent over the next two years to help finance the foreign exchange requirements of industrial projects involving the expansion of existing firms or the establishment of new enterprises. The proposed loan is intended to fill this gap. Of the $20 million loan, $8 million would be initially allocated to each financiera. The remaining $4 million would be available to each financiera on a first-come-first-served basis once each one has fully committed its original allocation. Given the progress made by the companies in improving their operations since the first loan, the limit for projects not requiring the Bank's prior approval would be raised from $100,000 to $200,000 for both financieras. The aggregate free limit for each financiera would be increased from $1.3 million to $4 million.