TABLE 17.-AID development loan authorizations, Jan. 1 to June 30, 1965, by area, country, terms, and purpose

TABLE 17.-AID development loan authorizations, Jan. 1 to June 30, 1965, by area, country, terms, and purpose-Continued

Latin America-Continued

Interest rate to Governments is 1 percent during grace period, and 2% percent thereafter, except as otherwise noted.

Source: Agency for International Development.

64

60

61

Agreements to institute this program were signed with six additional countries during the period under review: Brazil, Dahomey, Chad, Uganda, British Guiana, and Upper Volta. The agreements included the full range of government guarantees. This brought to 69 the number of friendly less-developed countries which have agreed to participate in this program (see table 20). Two existing agreements, with Korea, and Malaysia, were amended and expanded to include the protection against war, revolution and insurrection.

There were no claims paid during the 6 months under review. Only four small claims have been paid to date under the specific risk guarantee program. All four of the claims were made under a convertibility guarantee and totaled $77,176. The local currencies received by the U.S. Government in the transactions were later sold for a total of $80,838, thus causing a net gain to the Treasury of $3,662.

Representatives of the projects protected by guarantees issued during this period are: the manufacture of carbon black, production of paperboard, manufacture of electrical appliances, construction of low-cost housing, lube oil blending plant, international banking, silver, lead and zinc mining, production of bananas, manufacture of office ma

50 Not printed.

60 TIAS 5837; 16 UST 976. 61 TIAS 5812; 16 UST 789. ca TIAS 5818; 16 UST 827. 63 TIAS 5942; 16 UST 2050. 4 TIAS 5847; 16 UST 1068. 65 TIAS 5790; 16 UST 655. 66 TIAS 5850; 16 UST 1086.

chines, tube mill for steel pipe and tubing, and the manufacture of dry cell batteries.

Extended risk guarantees

68

Under authority of section 221 (b) (2) of the Foreign Assistance Act of 1961, as amended," the Agency for International Development is authorized to guarantee investors in any type of eligible project against losses up to 75 percent of the investment against any and all risks, except fraud or misconduct on the part of the investor. In December 1964, the Council authorized a new policy on extended risk guarantees which would permit AID to offer guarantees to U.S. lending institutions which would apply to the later maturities of loans, with the earlier maturities constituting the portion at risk of the investor. The guarantee would not apply to more than 75 percent of the investment plus accrued interest. Assignment of the guarantee would be permitted only with prior AID approval, and such approval would only be granted for sales of all or a portion of the loan in which the purchaser took a constant percentage of all remaining maturities, including any at risk. Except in unusual circumstances, guarantees will be made only in connection with projects which involve procurement of U.S. goods and services in an amount substantially equal to the amount of the guarantee.

Because new projects were progressing to the point where they would need commitments

67 22 U.S.C. § 2181 (b) (2).

from

68 See American Foreign Policy: Current Documents, 1964, pp. 1284-1291 (especially pp. 1288-1289).