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Cablegate: Ex-Im Bank Chairman Highlights Trade and Export Opportunties


DE RUEHBO #0276/01 0271733
R 271731Z JAN 10



E.O. 12958: N/A

REF: A) BOGOTA 55; B) 09 BOGOTA 3415

1. (SBU) Summary: U.S. Export-Import (Ex-Im) Bank Chairman Fred
Hochberg announced a $1 billion Preliminary Commitment to
Colombia's state-owned petroleum company, Ecopetrol, for the
purchase of U.S. goods and services during a visit to Bogota and
Cartagena on January 18-21. Ecopetrol's goals are to: expand its
oil production to one million barrels per day by 2015; promote
biofuels and petrochemicals; and modernize Colombia's two main
refineries in order to handle heavy crude. The Chairman told
President Uribe that Colombia is one of eight priority countries
for Ex-Im Bank financing. He assured the President that the $1
billion Preliminary Commitment is a significant step for Ex-Im
Bank, and that the door is open for additional commitments to
Colombia, which will help generate jobs in both countries. An
appreciative Uribe highlighted Colombia's challenges and
accomplishments, and the urgency for the U.S. Congress to approve
the bilateral trade agreement. The Chairman told the business
community he saw many Ex-Im financing opportunities for businesses,
including small and medium sized companies, notably in the oil and
gas, renewable energy, aviation, agriculture, infrastructure,
environmental (water treatment) and health care sectors. End

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2. (SBU) During a busy January 18-21 schedule, EX-IM Bank Chairman
Hochberg met with President Uribe, Environment Minister Carlos
Costa, Bancoldex President Gustavo Ardila, Ecopetrol President
Javier Gutierrez, Finance Minister Oscar Zuluaga, Central Bank
President Jose Dario Uribe, and representatives of Colombia's major
ports. The Chairman addressed the business community in Bogota at
an AmCham and Council of American Enterprises (CEA) gathering and
met over lunch with members of Women Corporate Directors who are
active in Colombia's financial sector. In Cartagena the delegation
visited the port and refinery, and met with Barranquilla Mayor Alex
Char, Cartagena Municipality Secretary General Alicia Saenz, and
the business community of the two coastal cities. Commercial
Counselor Maggie Hanson Muse, Ex-Im Chief of Staff Kevin Varney,
Senior Vice President of Trade Finance and Insurance John McAdams,
Americas Regional Director Xiomara Creque-Bromberg, and Press
Spokesman Phil Cogan accompanied the Ex-Im Chairman throughout the

Ex-Im Focus on Colombia


3. (SBU) Chairman Hochberg and the Charg????, accompanied by the
Ex-Im delegation and emboffs, met for nearly two hours with
President Uribe at the presidential palace on January 19.
President Uribe had with him the Minister of Environment, President
of Ecopetrol, and the President of Bancoldex (Colombia's Ex-Im
equivalent). Chairman Hochberg informed President Uribe that the
Ex-Im Board had approved on January 15 a Preliminary Commitment of
$1 billion to Ecopetrol for the purchase of U.S. goods and
services, which would be used in the oil company's expansion plans.
Hochberg described the commitment as Ex-Im's first large step in
Colombia, the third largest in Latin America after Brazil and

4. (SBU) The Ex-Im Chairman told President Uribe that while Ex-Im
Bank's relationship with Colombia is well established -- the first
loan took place in the 1940s -- he sought to boost U.S.-Colombian
trade and financial ties to a new level. The Chairman identified
Colombia as one of eight priority countries (out of 150 candidates)
that will be the focus of Ex-Im collaboration over the next three
to four years. The Chairman compared Colombia to the emerging BRIC

countries (Brazil, Russia, India, and China), suggesting that
Colombia would fit nicely into that group of fast-growing
developing countries.

5. (SBU) Chairman Hochberg praised President Uribe and Colombia
for its sound economic and investment strategies and attention to
social policies, which helped reduce poverty. The Chairman shared
that prior to his first trip to Colombia he consulted two important
friends of the country -- Congressmen Eliot Engel and Gregory
Meeks, both of whom briefed him on Colombia's achievements. As a
New Yorker, the Chairman noted how investment and prosperity
returned to New York City after Mayor Giuliani reduced crime.
Hochberg highlighted parallels between New York City and Colombia
and praised President Uribe for enhancing security, which has led
to the positive investment climate and economic development that
Colombia enjoys today.

An Appreciative President


6. (SBU) President Uribe welcomed the Ex-Im Bank commitment,
noting it will significantly help Colombia, particularly in
obtaining international financial credit for Colombia's growing
number of infrastructure projects. He expressed gratitude to the
USG, stating that U.S. cooperation contributed greatly to
Colombia's progress on security, ability to attract record levels
of investment, and social cohesion. The President stated more than
400 state agencies have been reformed, and as of 2010 universal
health care coverage would be achieved. Education is more readily
available to Colombian youths than ever before; however, he
admitted that more opportunities should be available to children
under the age of six.

7. (SBU) Uribe stated Colombia is becoming a world class energy
and minerals producer. Colombia is one of the world's top
exporters of coal, the region's largest producer of biodiesel, and
the second largest producer of ethanol in Latin America after
Brazil. Colombia exports natural gas to Venezuela and electricity
to Ecuador (even under drought conditions) and it is establishing
with Panama by 2013 an energy interconnection line along the ocean
floor. The President added that Colombia has or is installing
small biofuel energy plants in El Salvador, Guatemala, Honduras,
Costa Rica, and the south of Mexico.

Ecopetrol's Ambitious Plans


8. (SBU) Ecopetrol President Gutierrez described the company's $60
billion expansion plans through 2015 (averaging $8-9 billion in
investments per year) as focused on new exploration, increased
crude production, petrochemicals, transportation, and biofuels (ref
B). He noted that 60% of Ecopetrol's equipment comes from the
United States and Ex-Im Bank's $1 billion financing offer for U.S.
equipment and services will build on that trend. Gutierrez added
that with the Ex-Im commitment Ecopetrol intended to work with SENA
(Colombian Training Institute) to provide training and job
opportunities to local minorities and was interested in
collaborating with USAID.

9. (SBU) Gutierrez said that the picture was not always positive.
In 2002, projections predicted an imminent end to Colombia's

petroleum self-sufficiency; oil production registered slightly more
than 230,000 barrels per day. However, because of sound GOC
policies and strong investor confidence, Colombia is now producing
734,000 barrels of oil per day. The objective is to reach one
million barrels of oil per day by 2015.

10. (SBU) President Uribe noted that foreign direct investment in
Colombia reached an all-time high in 2008 -- $10.6 billion. The
vast majority of the investments are in the oil and mining sectors.
Despite the world financial crisis, Colombia has fared relatively
well, with foreign investment reaching approximately $8.5 billion
in 2009. Uribe noted that while the United States remains
Colombia's number one investor, Colombia has attracted investment
from a diverse group of countries, including Spain, France, UK,
South Korea, China, Chile, and Brazil.

11. (SBU) Gutierrez highlighted Ecopetrol's efforts to produce and
distribute cleaner diesel fuel throughout Colombia. He noted that
the GOC has lowered the particles per million (ppm) in diesel
outside of the capital, reducing it from 2,500 to 500, and the
trend is to lower that figure even further by 2012. Diesel in
Bogota has 50 ppm. Highlighting Colombia's commitment to improve
air quality, Minister of Environment Costa said Colombia is already
operating public buses that use biodiesel. Cars are also using
biodiesel and ethanol blends, and Colombia will soon be importing
cars that have the "Euro 4" standard, the first country in Latin
America to do so.

Colombia's Constructive International Role

--------------------------------------------- -----------

12. (SBU) The Charg???? thanked President Uribe for Colombia's
leadership role in the Copenhagen climate change negotiations and
its relief assistance to Haiti following the tragic earthquake (ref
A). He also noted that donated U.S. firefighting equipment would
arrive soon to help Colombia combat its spreading forest fires.
The Charg???? highlighted how Colombia has transformed itself from an
aid recipient to a valued partner. Colombia is sharing its
knowledge and expertise in Central America, Mexico, and other parts
of the world on key issues such as security, energy, and climate

13. (SBU) President Uribe responded by noting Colombia has trained
more than 11,000 Mexican police and is working closely with the
security forces of Panama, Costa Rica, Guatemala, and Caribbean
nations, such the Dominican Republic, on law enforcement and
counter-narcotics. He added that Colombia recently assisted
Paraguay in resolving a kidnapping. Despite differences with
Venezuela, Bolivia, and Nicaragua, President Uribe noted Colombia
has many friends. It has signed Free Trade Agreements (FTA) with
Chile, Mercosur, Central America (El Salvador, Guatemala, and
Honduras), Canada, and is still in talks with the EU. Colombia has
also negotiated Bilateral Investment Treaties with China and India.
All these efforts, the President said, have transformed Colombia
and raised business confidence in the country. He indicated he
seeks greater access to the world's markets for Colombia.

Another Plug for FTA


14. (SBU) President Uribe emphasized the importance of U.S.

Congressional ratification of the U.S.-Colombia FTA. He indicated
that bilateral U.S.-Colombia trade had declined notably in 2009,
which made ratification of the trade accord more urgent. The
President said he hoped that after the U.S. health care reform
debate, President Obama would put the trade accord before the U.S.
Congress for a vote. Uribe emphasized that investors are watching
Colombia closely, and many have said that once the United States
ratifies the trade accord, their firms will choose Colombia for
huge investments. Chairman Hochberg indicated that the past year
has been particularly busy for President Obama, but he would relay
President Uribe's message to Washington on the importance of the
trade accord.

Courting Private Sector


15. (U) Chairman Hochberg addressed a combined AmCham and CEA
forum of business leaders in Bogota. He highlighted Ex-Im Bank's
interest in identifying projects that expand trade and export
opportunities in the two countries. He noted Ex-Im loans or
guarantees not only help promote Colombia's economic development
but also assist in the export of high-quality U.S. equipment and
services. The Chairman emphasized, as he did throughout all his
meetings, that helping small businesses export their products -
often to other small or medium sized companies - is a top priority
of the Ex-Im Bank.

Ex-Im Opportunities in Cartagena


16. (SBU) Chairman Hochberg visited the Cartagena refinery,
Reficar, which is undergoing a $3.8 billion modernization and is
evaluating financing options with Ex-Im. (Note: Ex-Im's
collaboration is an outgrowth of a U.S. Trade Development Agency
feasibility study in 1996. End Note.) The project will convert
Colombia's refinery into a regional state-of-the-art operation with
high environmental standards (ref B). The refinery will become
operational in January 2013 and be able to refine heavy crude.

17. (SBU) Cartagena's Deputy Mayor Alicia Saenz told the visiting
Ex-Im delegation that the city has five new hospitals and is
looking to equip them with new medical equipment, preferably from
the United States. She also noted that the city is undergoing a
sovereign guarantee review and hopes to obtain a triple A rating,
up from a triple B plus.

Comment: Ex-Im Commitment Drawing Attention to Colombia

--------------------------------------------- ----------------------

18. (SBU) The Ex-Im Chairman's highly-productive visit -- which
received prominent media coverage -- highlights the potential for
increased trade and U.S. export opportunities in Colombia. The $1
billion Ex-Im commitment will go a long way in drawing further
attention to investment opportunities in Colombia -- which is
embarking on a series of multi-billion dollar infrastructure
projects over the next several years.

19. (U) The Ex-Im delegation cleared this message.

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