VZCZCXYZ0001
RR RUEHWEB

DE RUEHBO #0095/01 0271917
ZNR UUUUU ZZH
R 271916Z JAN 10
FM AMEMBASSY BOGOTA
TO RUEHC/SECSTATE WASHDC 2276
INFO RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHBO/AMEMBASSY BOGOTA
RUEHBR/AMEMBASSY BRASILIA
RUEHBU/AMEMBASSY BUENOS AIRES
RUEHCV/AMEMBASSY CARACAS
RUEHDG/AMEMBASSY SANTO DOMINGO
RUEHGT/AMEMBASSY GUATEMALA
RUEHLP/AMEMBASSY LA PAZ
RUEHME/AMEMBASSY MEXICO
RUEHPE/AMEMBASSY LIMA
RUEHQT/AMEMBASSY QUITO
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RUEHSG/AMEMBASSY SANTIAGO
RUEHSJ/AMEMBASSY SAN JOSE
RUEHSN/AMEMBASSY SAN SALVADOR
RUEHTG/AMEMBASSY TEGUCIGALPA 0760
RUEHZP/AMEMBASSY PANAMA
RULSJGA/DEPT OF TRANSPORTATION WASHINGTON DC

UNCLAS BOGOTA 000095 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EINV ETRD ECON ENRG EAID PGOV CO
SUBJECT: EX-IM BANK CHAIRMAN HIGHLIGHTS EXPORT AND TRADE 
OPPORTUNITIES IN COLOMBIA 
 
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 
Summary. 
 
 
 
¶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 
visit. 
 
 
 
Ex-Im Focus on Colombia 
 
--------------------------------- 
 
 
 
¶3.  (SBU) Chairman Hochberg and the ChargC), 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 
Mexico. 
 
 
¶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 ppm, 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 ChargC) 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 ChargC) 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 
change. 
 
 
 
¶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. 
BROWNFIELD