Colombia Secures $1.2 Billion International Loan

Colombia has secured international loans worth $1.2 billion. This funding will be allocated to supplement the needs of this year’s general budget and to finance projects related to the government’s commitments to the peace agreements.

Among the signed loan agreements are two worth €300 million each ($642 million in total) with the German public development bank KfW, as confirmed by the Colombian Ministry of Finance.

This is not the first loan Colombia has obtained from the German bank. Back in 2014, the government of President Juan Manuel Santos secured a $100 million credit to finance peace efforts, which, at that time, were underway with the FARC guerrillas at the negotiation table in Havana.

International loan to strengthen budget

At a time when, due to technical issues, the availability of some approved allocations for Colombia’s general budget for 2024 has been compromised, the country has secured significant economic support through access to international loans.

“These loans contribute to financing the appropriations approved by Congress in the General Budget of the Nation and materialize the cooperation agenda that Colombia has had with Germany for many years in the areas of peace and development,” the ministry said in a statement.

“I am pleased that with this line of credit, my country can once again contribute to the peace processes in Colombia. Both to the implementation of the 2016 Agreements and to the current processes,” said the German Ambassador, Martina Klumpp.

General-purpose loan to pay off debt

According to Reuters, the Ministry of Finance also finalized a general-purpose loan operation totaling $663 million, of which the Inter-American Development Bank contributed $500 million and KfW contributed €150 million.

“This loan aligns with both the gender and diversity action plan of the IDB Group and the German feminist development policy, materializing the cooperation agenda between Colombia and Germany,” another statement confirmed.

As told to Reuters by the Director of the Ministry of Finance and Public Credit, Jose Roberto Acosta, this money will be allocated to meet the country’s external debt obligations. “There are no intentions to monetize. The purpose is to continue servicing external debt,” Acosta stated.