NAME OF PROJECT: Beautiful Playas-Engabo Major Housing Project in the best

second
weather in the world, 2013
AMOUNT TO BE LOANED: US$ 460 million American Dollars.
PURPOSE: To Construct 20,000 low-to-medium income people houses, in stages of 5,000 houses
each. Contracts with local Municipalities will be celebrated between the parties, namely:the
projects promoters, the Municipality of Salinas and Playas Municipalities, and the houses
beneficiaries, anda qualified international financial institution.
INTEREST: LIBOR + 1 annually.
TERM: 20 years with a 2-years grace period.
GUARANTEE: Municipal Bonds and Government Construction Bonds both
totalingUS$460,000,0000 Dollars, and a pool of mini-municipal bonds for $460 Million Dollars
with a face value of US$100.00 each to be paid within a 20-years term on the monthly basis,
including a coupon of US$1.00 each with a total of US$4,600,000 Dollars..
ENTREPRENEUR: Group of Municipalities minimum covering 1,000 hectares of lands where
theconstruction projects per stages are going to be undertake it by leading Construction firms
inEcuador.
PROJECT ORIGIN: Ecuadorian are suffering a 2.6 million deficit of houses which an
increasinggrowth of 50,000 houses a year. The main projects purpose is to cover only the
increasinggrowth per year, applying friendly policies and the use of new international sources of
capitalwith appropriate long-term credit scenario to let the low-income people to adjust a
reasonablemonthly payment and to obtain the government construction bond of US$6,000 per
each of the 20,000 housing units, totaling US$120,000,000. All Government bonds are cashbacked.
DESCRIPTION OF PROJECT: Several leading constructing company in Ecuador, duly approved
by the Ministry of Housing of Ecuador, are undertaking the challenger to constructlow-income
peoples houses, including important construction companies based with longexperience in the
construction business, like major works in Guayaquil such commercial malls,Guayas Bay shore,
shopping centers, supermarket buildings, churches, multi-family houses,individual houses, etc.;
and the accumulation of sound equity on paid-in capital, constructionmachinery and labor force,
and good relations with political and banking circle in Ecuador. This important housing
construction project is going to patronage and guarantee by Ecuadorian Municipalities in
Ecuador.
FINANCING PLAN: the total cost of construction per house, including land and theinfrastructure
works is US$23,000 American Dollars, totaling . The opportunity cost on raw materials,such as
steel, iron and cement are guaranteed by future purchasing contracts with the localcement plant
and steel mill under excellent price policy to be covered by sureness of the bigsales amounts
required in the project, in such way, these providers will act as covered partnersin this
construction project. In addition, the low-cost labor force and different lands provided bythe local
Municipalities, and the huge deficit of houses, assures to undertake this project into a
success. The landlords/Municipalities will transfer the property dominion into a fiduciary contract
which also
will receive the corresponding transferring value for the purchasing of their lands. The
Ecuadorian Municipalities will guarantee the international loans against the deposit of municipal
bonds totaling US$460 Million Dollars to be placed in a local prime bank issuing a banking MT760 with full bank responsibility against a `pre-advise bank engagement issued by a prime bank
1

of the international lender to fund the complete construction project in Ecuador. The Funds
Administrator or Trustee will manage the funds toundertake for developing the entire housing
project in stages of 2,000 houses each, and per each constructing firm in Ecuador
Other significant factor that influences strongly in the success in this project is the current
Governments enthusiasm in the solution of low-income people deficit houses, by compromisinga
subsidiary payment called a construction bond of US$6,000 Dollars to finish to construct a house,
that means a pre-payment of 60 months at a rate of US$100,00 per each month for each final
beneficiary of 20,000 houses.Totaling US$120 Million Dollars for 20,000 families of low-income in
the Republic of Ecuador.
Financing Scenario:
Total Sale Cost per each housing unit: US$23,000 Dollars
Term: 25 years, with 2 of grace period
Monthly Payment: US$100,00 plus 1% monthly interest (coupon)
Down Payment: US$100,00 Dollars
OTHERS PROJECTS OBJECTIVES.Besides, the current projects objective is focused is contributing to develop a real housingmarket
in Ecuador, to help to overcome the economic standstill that Ecuador is facing at thismoment.
Housing construction is one of sectors that generates more direct and indirect JOBS ina short
term. We see the housing construction as a real estate industry, using fresh fundsresources on
long term and with financing tools that eliminate some taxes or encumbrances.Housing
construction improve the family welfare and generates massive labor and employmentin the less
possible time frame.
The housing construction represents for the Ecuadorian economy , in the current project, as
thebest distributed investment, because it goes and reach the biggest number of families
helping toimprove peoples purchasing capacity, constituting a long term saving, replacing the
classicmonthly rent cannon which at the end it does not produce any result; in our project
theEcuadorian family is paying its own house and in this manner the money or funds used
aredistributed in a vast number of providers from all over the economic sectors. The majority of
thematerial and products employed in the construction field are domestically made and It
isimportant to keep in mind that $0.35 cents of a dollar invested in the construction, it goes
toinformal labor of our economy.
This project will benefit around 100,000 people that belong to the middle cast and below,
thismeans an average of 5 people per house. They normally could not undertake this
projectindividually, because they have not available the necessary tools or financial instruments
orbanking to execute this important project. Thus the urgency to link all the factors to
undertakethe construction of houses, such as the subsidy or construction bond granted by the
Ecuadoriangovernment. The BIES-Banco del Seguro Social or BancoEcuatoriano de la Vivienda,
both Government Banks are potential discounter of the pool ofmortgages/Mini-Municipal portfolio
for the 20,000 houses to be constructed, of course, at convenient and mutual discount between
the partiesA.- LANDLORDS AND CONSTRUCTORS.The landlords owners of the most appropriate and characteristics lands for developing
thisproject, under the best construction costs and basic infrastructure parameters.
Thisincorporation avoid that the landlord sells his land at a lower price, instead he is able to sell
it atthe best opportunity price being part of this project which sells constructed houses with all
basicinfrastructure. The repayments for the lands will be administrated by a qualified trustee that
isfamiliarized and counts also with a good infrastructure to manage as well the funds placed
byan international financing firm as the funds generated from the sales of constructed houses.
The constructing firms that will provide with houses designing drawing and the
municipalitiespermits and authorizations, including their construction systems. Besides, the
constructing firmswill conduct the ground topography, soil studies, the feasibility studies on
construction costs;including housing finishing, sewer, drainage, electric and telephonic network,
2

and water pipelineinstallations. The constructing firms will also provide for the trusts
autonomous capital with adescriptive report and technical specifications, complete work budget,
including retaining oftaxes. The constructor also will elaborate the evaluation schedule of works
and thedisbursement chart of investment.
The constructor will work jointly with the house sales promoters to assure the
constructionfeasibility and projects commercialization to reach the sales equilibrium point, which
will beguarantee by a prime banks stating the following:
.- Construction starting date fixed by the promoter.
.- The assurance to count with funds and necessary financing instruments to finish the
allconstruction works.
.- Ending date for all works.
.- The assurance that the funds will conducted exclusively to undertake this project.
.- To demonstrate that the project has technical, financial and legal suitability to beaccomplished.
.- Sales schedule with appropriate customers or final beneficiaries, who assure with their
ownedresources, including other source of resources and financing instruments.
.- To involve each potential purchaser or final beneficiary to accomplish the
conditioningfulfillment to overcome this project.
The constructing companies and sales promoters will integrate part of the Trust that
willadministrate the funds for all housing construction operations and sales of the
housesrespectively, in every stage of this project. The projects trustee will administrate all
bankingfinancial operations.
B. - PROPER TECNOLOGY.
For developing this housing construction project it is necessary to apply an excellentconstruction
technology that provides the following characteristics:
1.- The best construction costs by employing high structural capacity materials.
2.- High resistance / weight rate to absorb seismic movements.
3.- Fast construction system with a minimum of supervision.
4.- Long-useful-life materials employed for the houses construction.
5.- Modular flexibility to allow adjusting extensional construction works.
6.- Solid and minimum wall weight.
7.- Excellent thermal resistance to save energy and environmental control for coldness
andhotness.
8.- Facility to hide electric and sewer installations.
The technology must be protected under a construction patent duly accredited by
professionalschools in Ecuador, issuing a patent certificate for this project. The use of this patent
constitutean additional guarantee for the granting the line of credit by the international investor,
based onthe log lasting life of the houses which will not suffer any kind of damages or problems
duringthe credit term, as much as for the for the insurance policy that covers this negotiation.
C.- FINANCING .The financing will be carried out by the conversion of this project and its promoters into
aPreferred Client under a Real State Trust, which will include the following parties:
Thelandlord, the constructor, guarantor, and the trustee which is the Funds Administrator (IFI)
forthe construction and the funds generated by the project, under a financing scenario that
allowsthe proper development of this project in stages of a 5,000 houses, under the following
requirements:
1.- A reasonable economic down payment equivalent to US$100. 00 to finance the
primaryexpenses costs of the total loan amount to be financed per house..
3

2.- Reasonable monthly payment, including the financing of the construction of the basicservices
such as potable water, sewer, telephone and electricity networks, etc. this meansaround 30% of
the final construction cost per each house.
3.- 5% annual interest fixed during the loan financing term.
4.- The basic repayment term per house is 25 years.
5.- Insurance policy against fire, disaster and disablement.
6.- 1,2% payment for the Funds Administrator to look for financing and be the PortfolioManager.
7.- Banking guarantee to back 60 monthly payments averaging $100.00 each. Once finishingthe
first 60 payments, the banking guarantee will roll automatically for the second 60
monthlyobligations. The total monthly payments will totalize 100% of the houses cost value.The
International Financing Investors will place the all necessary funds, after reaching itsequilibrium
point, which is covered by the monthly banking guarantee to initiate right away theexecution of
the project, first of all the model houses, so the interested people can have a realvision of their
future selected home from them. The financing company will provide all the necessary funds to
develop this project through its different housing construction stages.
D.- SUBSIDY FROM THE STATE.The Ecuadorian state will issue through the MIDUVI-Ministry of Ecuadorian Housing, the
respective subsidy bonds applying the housing construction, without increasing the states
external debt, and letting in this way the 100% financing of the popular low-income
peopleshouses construction. This bond issue by MIDUVI-Ministry of Housing Development is
currently of US$6,000,00 per house..Finally, The Trust will join the four factors aforementioned,
and appoint a trustee asadministrator, including the Portfolio Manager to accomplish successfully
with this project.
2.3.- PROJECTS RISK IN BORROWING MONEY.
The projects risk are duly limited and controlled for the following reasons: 100% of the
housestotal cost is backed by Municipal Bonds and Government Construction Bonds against a 50
World Top bank debentures of cash on the account of each and all employees and workers
(20,000 employees and workers) under the SEA-Santa Elena Agreement, the legal framed
contract to cover legally all of them.
The Government Construction Bonds of $6,000.00 is equivalent to 60 monthly payment to be
place into a financial credit platform to obtain a rolling bank guarantee of $120 Million Dollars for
all 20,000 houses to be constructed in the complete project. Additionally, US$1,200, equivalent
to 12 monthly payments until the complete payment of each house will be deducted from the
monthly salary payment of each and all 20,000 employee and workers under SEA-Santa Elena
Agreement.
TOTAL CONSTRUCTION HOUSE PRICE PER UNITS: US$23,000.00 DOLLARS
A.- US$100.00 down payment to cover only the initial financing costs
B.- US$6,00.00 governments subsidy construction bond.
C.- US$16,900.00 plus 1% interest per month during the next 25 years.
.- STEPS TO BE TAKEN FOR DEVELOPING THIS PROJECT.
.- PROGRAM STARTING.Once the Real Estate Trust is dully established, then the point of equilibrium will be reach bythe
issuing of the rolling bank guarantee for $1,200.00 per house and per year by theinternational
financing institution, thus the executing of the construction works will start rightaway according
the constructing firms schedule. Total annual payment per 20,000 housingunits is
US$24,000,000 at a rate of US$1,200 per year, and total payment during the term oftwenty
years is US$600 Millions Dollars for the total of 20,000 housing units.
.- BENEFICIARYS SELECTION
The projects administration, Etanolsa S.A.s Social Welfare Task Force Team will undertake the
selection of potential beneficiaries using mainly the SEA-Santa Elenas employees and worksdata
4

base formed by 20,000 pre-classified families, plus 5,000 new families to be called by the local
media to fulfill all requirements aforementioned and then implementing a record to become part
of this project whose objective is to provide a complete finished house per each and all 20,000
employees and workers under the legal labor contract under the SEA-Santa Elena Agreement.
.- DEBT ADMINISTRATION.The projects trustee (Mini-Municipal Bonds Trustee) will be in charge of collecting all the funds
generated by subsidy construction bonds, beneficiary down payments, rolling bank international
guarantee, and finally monthly amortization monthly payments of all 4.6 million Mini-Municipal
Bonds to be collected during 25 years in the Ecuadorian Banking System . The Trustee also will
be responsible for semi annually or annual payments to international lenders, according to the
chart of payment including in this project. All legal and financial documents will be placed in a
prime banks safekeeping custody until the complete fulfillment of all projects obligations on
favor of the international lender by part of the financial beneficiaries or future house owners..
.- FINANCIAL SCENARIO.The fixed annual interest: Libor + 1%
Total amount to be loaned: $23,000.00
Down Payment: $100.00
Subsidy Government Bond: $6,000.00 (equivalent to 60 monthly payments per house)
Total Balance to be paid: US$16,900.00
Trustee administration fees, including Portfolio Manager: 0.1% per projects registration.
.- FINANCING PROJECTS COST.Total amount to be financed per house: $23,000 Dollars, include 70 square meters ofconstruction
, 200 square meters lot of land, and also including the infrastructure works for the complete
project.
Total Loan to be financed per house: $23,000.00
Trustees administration fee 0.1%: $230.00*
International Lending Interest: 12% annually, 1% per month or US$1.00 per month, including as
a coupon of the Municipal-Mini Bonds with a face value of US$100.00 each.
.- HOUSING SALES COSTS.7.1.- COST PER SQUARE METER OF LAND PER EACH HOUSE.
Per meter
200 sq. meter
TOTAL COST
20,000 HOUSES
US$15.00
US$3,000.00
US$3,000.00
US$60,000,000
7.2.- COST PER CONSTRUCTION METER.
Per Meter
50 sq. meters
Total Cost
US$270.00
US$13,600.00
US$13,600.00

7.3.- CONSTRUCTIN COST AND LAND

Land
Construction
US$3,000.00
US$13,600
Total 20,000 Houses
Land
Construction
US$60,000,000. US$272,000,000.0
00
0

COST.Total Cost
US$16,600.00
TOTAL
US$332,000,000
.00

7.4.- COST OF URBANIZATION.5

20,000 Houses
US$272,000,00
0
20,000 Houses

The cost to urbanize the land selected per each stage of construction, including cost of vehicular
and pedestrian streets, sewers, electric lighting and telephonic lines, ecological parks,etc.
equivalent to 30% of the total housing construction cost of $23,000.00 per each house, that
means $6,000.00 dollars,considered in the following chart:
Cost per house
Land Cost
Construction Cost
30% Urbanization
Total Cost per 20,000
Units

US$23,000.00
US$3,000.00
US$13,600.00
US$6,400.00
US$460,000.00

.- Financing Repayment Program: each and all 20,000 housing units will be paid on a
monthly basis. The final beneficiary of each house will pay the corresponding face value of each
of the 230 Municipal Mini-Bonds at the a commercial bank of the Ecuadorian Banking System
issued by the Municipality per each house. The total series of the Municipal Mini-Bonds issued are
4.5 Millions bonds, with a US$1.00 Coupon each to be paid on monthly basis. The corresponding
digits are shown in the chart below:
Monthly payments of the Municipal Mini-Bonds
No. of
US$100.00 Value
Bonds
Per One
230
US$23,000
House
20,000
4,600,000
US$460,000,000
Houses

No. of US$1.00 Coupon

No. of Houses
No. of Coupons
Value of
Coupons

One House
230
US$23,000
.00

20,000 Houses
4,600,000
US$4,600,000.00

Monthly payments of Municipal Mini-Bonds plus Coupons

Value of Coupons
US$4,600,000
Value of Mini-Bonds
US$460,000,000
Total
US$464,000,000

12.- DESCRIPTION OF THE URBANITATION

12.A.- LOCATION
12.D.- LAND TRANSPORTATION.The lands are located to the north of General Villamil-Playas city, crossing the road named
Playas-Engabao city. This facilities the urban passenger public transportation as well as thedirect
private driving transportation to these sites. It only takes 10 minutes by urban public and
aspacious bus terminal will be constructed to facilitate all the services related with urban
publictransportation. Besides, the project includes enough and ad equated parking
placestransportation per each housing units.
6

Other lands are located at the Anconcito, Parrish of Salinas Canton with 30 hectares or 300,000
sq. meters.
300,000 Square meters of urban areas located at Santa Elena Canton, Capital of Santa Elena
Province. Total area to be developed to construct the complete project consisting of 20,000
housing units 3,000,000 square meters.
12.E.- LOCAL STREETS.The urbanization will include the construction system of paved 8 meters-width streets that Hill
cover the whole urbanization to allow the free driven-transportation for urban public as well as
for domestic personal private transportation that allows a everyone to park into their own garage
inside their homes.
12.F.- FUNDAMENTALS OF THE DESIGN.To take the best advantage of the land topography, urbanization project has been designed, to
construct at the front part of each housing unit a garage or parking place per each unit. Besides,
the 30% of green areas that the Municipality demands by law or enforce per urbanization to be
constructed. Additional swimming pools for kids will also to be constructed for the security of all
families that will be the corresponding beneficiary per each housing unit.
12.G.- CHART OF USES OF SOIL.TOTAL AREA FOR CONSTRUCTING
HOUSES:
GREEN AREAS 30%:
HOUSING AREA TO BE SOLD:
COMMERCIAL AREA TO BE SOLD:

4,000,000 square meters

900,000 square meters
3,000,000 square meters
100,000 square meters

13. I.- DENSITY.In our project we are promoting a Housing Construction Using Simple Technology: "LowCostHousing" for short We were able to offer construction at prices up to 50 percent lower than
thegoing rate."
The large-scale contract from the city of Playas-Engabao housing project was incorporated
intothe project, which is being implemented by a Low-Cost Housing project advises the
municipaladministration on planning and implementing low-cost housing programs, trains and
upgradeslocal human resources, and promotes small- and medium-sized construction
companies.Offering know-how and services in international markets on a commercial basis, is
responsiblefor the technical and financial execution of the construction project in the city of
Playas-Engabao Housing Project. The main goal is to take action to reduce the desperate need for
housing, toimprove construction quality and at the same time to create jobs.
"Low-cost housing technology means inexpensive, good quality and durable
construction,"explains Eng. Roura, technical advisor to the project. "The future residents must
becomeowners and pay 10 percent of the construction costs." The remainder is being financed
through15-year construction loans. The Promoting firm administration is providing pre-financing.
"Bydoing this, we want to support a sense of ownership and responsibility among the residents
also for repairs, maintenance and looking after the various facilities".
The technical cooperation enterprise for this major housing project is widely requested to
theinternational private market for sustainable development with worldwide operations. We
arelooking for the provision of viable, forward-looking solutions for political, economic,
ecologicaland social development in a globalized world. Our main objective is to improve
people's livingconditions on a sustainable basis, framed under the following terms and
conditions:
Urban management, focusing to support local policymakers, administration experts and
localauthority associations in managing municipal development. For instance, delivery
7

approachesby which to improve public service provision and manage municipal finances and
lands. We areaiming for advise stakeholders in politics, administration, business and society on
how toimplement these approaches.
Local land management
Advise for towns and communities on managing land and property and help them to
createlegally defined ownership structures and transparent land markets.
Interurban cooperation
Advising to local authorities on forging alliances with other towns and communities that
helpthem to assert their political interests and solve common problems more effectively.
Creating a live able urban environment (UrbanEco)
Strictly confident in promoting environmentally sustainable development in urban settings,
forinstance through waste management, clean air policies and sustainable production
andconsumption.
Improving urban infrastructures and services
We looking for support the improvement of urban infrastructures in the fields of waste,
energy,transport and water; our aim is always to involve the population and the private sector.
Local business promotion
In cooperation with the private sector to promote the competitiveness of business locations
andthe local economy.Formula to advise local authorities on promoting small and micro
enterprisesin the informal sector in order to reduce poverty.
Developing socially inclusive, safe cities
Help to promote civil society development to enable all citizens to participate in
politicalprocesses. We also support peaceful forms of conflict transformation.
Urban renewal and using cultural resources for development purposes
We are aiming to support towns, cities and communities in restoring their historical
buildingsusing local knowledge an important precondition for developing a tourism industry.
Good Urban Governance: We are focusing in how to help Municipalities in developing
andtransition countries, we are aware and acknowledge that urbanization is progressing at such
afast pace that the authorities' administrative and urban development capacities are unable
tokeep up. As cities are not just economic and political centers but also major sources of
socialrenewal, undesirable social, economic, ecological and institutional developments can
oftenimpact negatively on the entire development process. Good 'urban governance' is hence
thekey to overcoming pressing development problems, above all to
create live able urban environments offering high levels of safety, mobility, leisureopportunities
and quality of life, as well as employment for millions of people
reduce urban environmental and health risks effectively through advanced wastemanagement,
clean air, transport and urban health policies
allow disadvantaged population groups to participate in the social and political aspectsof urban
life and benefit from economic progress
offer urban integration support for migrants to the cities
transform cities into service centers for rural regions and hubs linked into the globaleconomy
create urban networks as superregional forums for cooperation in the fields ofpeace building
and other global issues.
Urban and municipal development :We know that half of all the worlds people are
organizingtheir lives in cities and towns. As the lowest political and administrative level of
government,cities are of special significance in the provision of state-run services. They are also
thehubs of economic momentum, social life and culture. Cities exert an enormous appeal:
8

theirpopulations are growing day by day. By 2025, two-thirds of the worlds population will live
incities, including Ecuador.
Cities with good living conditions offer their inhabitants many opportunities, from a share
ineconomic growth, to access to infrastructure and services, to participation in political
decisionmaking.
Accompanying these opportunities, however, are growing demands on the capacities ofmunicipal
institutions. As public funding dwindles, public resources must be stretched to meetthe needs of
more and more people. In many places, urban poverty is on the rise.
Environmental resources are being strained to the limit.
In our project we intend to support the Municipality of Playas-Engabao in their search
forappropriate solutions to their problems. We are offering them a single address for
obtainingservices based on broad experience in a variety of fields. These services cover not only
specificareas such as water and sewage, provision of housing, transport, air quality, and
localeconomic promotion, but also the preservation of urban cultural traditions. We are looking
alsoto help in implementing municipal management methods. Together with local actors, we
believein the strengthen the capacities of cities and towns to accomplish their tasks
economically andin a manner responsive to public concerns. Local development potential is
optimized by poolingthe resources of the political leadership, the municipal administration, local
citizens andenterprises, in pursuit of common purposes and goals as the one in this major
housing project.
Poor population groups also stand to benefit from this joint effort through better access topublic
services and being specifically integrated into decision-making processes.The urban
millennium (Kofi Annan General Secretary of the United Nations) has begun: in2008, more than
half of the global population will live in cities. By 2030, there will be 2 billionnew urban dwellers
(180,000 daily), practically all of them in developing countries.
The people in these expanding cities need jobs, housing, safe drinking water, provision ofgoods
and facilities for sewage and waste disposal, health care, education and affordabletransportation.
Governments, administrations, civil organizations and the private sector recognize that theymust
take action in view of the explosive growth of the urban population in developing countries.In our
major housing project we are aware of the challenges confronting city planners andmanagers. It
has been studying and carrying out this urban development project for three years,working with
many entities private and public to achieve one of the best major housing development project
in Ecuador.
We are now working very hard in this Playas-Engabao Housing Project to promote a
dialoguebetween city administrations and residents of poor districts. Where communication
barriers andsilence once prevailed, today readiness to discuss and cooperate is taken for
granted.Particularly, we are looking for international private financing to extend or provide a
successfulan urban line of credit backed by an international fund. This will be managed between
theresidents themselves and offers promotional instruments tailored to the needs of the
extremelypoor, and it even provides a credit card for obtaining the construction materials.
We are working to formulate and implement poverty-oriented development plans, that
weconsidering in our major housing project to implement sustainable maintenance systems
forlocal infrastructures, apply transparent budget management procedures, and
provideopportunities to the communities to participate in local decision-making.
Our approach is the program to supports state and non-state actors by jointly
developinginstruments and methods which ensure poverty-oriented and participatory decisionmakingprocesses in the districts. Examples include the Poverty Profiling, Mapping and ProPoorPlanning methodology which allows to assess the poverty situation in a district, and
theestablishment of district databases in order to improve the availability of social and
economicdata. Our program will aid districts in the establishment of operations and maintenance
(O&M)systems for local infrastructures (such as markets and lorry parks).
The planning instruments will be developed by the program and for sure to be have
beenincorporated in the planning guidelines of our national planning commission for the 2008
9

2016medium-term development plans of the Playas-Engabao Municipality. In our project the

districtdatabases will be contributed to a significant increase of Municipality' own revenues.
Guayaquil, Ecuador, South America
Name of the Project: Beautiful Engabao Project
Construction Firm: Roura Carrion Ca. Ltda.
Managing Director: Wellington Gallardo
Total Loan Amount: US$460 Million dollars
Term: 20 Years, with 3 Years of Grace Period
Interest: 12% annually with a 3 years grace period, in the form of a US$1.00 coupon attached to
the Municipal Mini-Bonds with a face value of US$100.00 to be paid at a bank in the Ecuadorian
Banking System.
Abstract
The beach matter of this project is located at the coast of General Villamil - Playas
namedBeautiful Engabao Project and covers about 6 kilometers along the Pacific Ocean, right
infront of its downtown. At present the beach is found in virgin state that is evidence by
abundantsand on all surfaces appearance in the shore of Playas Engabao.
This project consist and is summarized in the following segments:
The project includes the control and protection of the beach and is complemented with
theconstruction of a Malecon on the seafront, not only because they should form a sole
concept,but fundamentally to constitute the best financial feasibility, based in on tax services, to
becollect for the infrastructural civil works to be done by such urban regeneration. This will
allowcovering an important segment of the credit amortization obtained for the construction of
thesame. To reinforced and assure this feasibility, a Municipal concession contract will be
celebrated between the Municipality of Salinas and the promoting firm of this project.Besides,
The Municipal Government of Playas authorities leading by its Major is agreed andengaged in
developing jointly with this important housing construction project, including theconstruction of
the new Malecon, with a global vision considering the following:
A design concept that does not block the view to the sea, from the construction erected right in.
The Construction of a public pier, to provide service for national vessels, for sport fishing,cruises
and other aquatic sports. Loading and services for vessels for cruises.
Utilization of municipal lots of land close to the seafront to develop infrastructure works such
asparking zones, commercial stores, amusement centers, etc.
The legal tool to frame and regulate between the private investment sector, in the present
casethe company (name of the company), and Municipality of Playas is the concession which
alsowill assure the returns of the investment through the collection of municipal taxes. This type
ofcontract give (name of the company), the possibility and security to managed
theseaforementioned fundamental aspects in the concession. This has been our proposal to
theMunicipal Government of Playas which has been also accepted by the authorities of
theMunicipality.
Potentiality of the City of Playas - Engabao
The project is based mostly in the potentiality of the city of Playas - Engabao. This beach
resorthas population of 90,0000 inhabitants (during the beach resort season reach to 150,000)
and isconsidered the sea-side resort of Guayaquil (pop. 2.5 million) where the middle-to high
classpeople has constructed numerous apartments and villas to spend the vacation time during
ourrainy season from December to May. Besides, Playas is been projected as a city of
permanentresidents, at this moment, counts with characteristics that over-passed the condition
of a resortfor weekends, and now can offer warm and kindly hospitality all the entire year for
national andinternational visitors. Among its main characteristics as a resort, we can mention the
following:
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Strategic national and international geographical location.

Basic infrastructural services.And Well-gained prestige in fishing and nautical activities,including
sport fishing.
Playas - Engabao is been launched with this project to a national level and
internationalincreasing scale. This is due to that the Pacific Rim is also being transforming in the
most importcommercial route worldwide. As a beach resort is capturing international visitors and
offeringeach time better environmental conditions. In order to do that the city is generating and
offeringattracting and recreational activities during the whole year, including sports at national,
interregionaland international level.
Playas, considered as the closed beach resort to Guayaquil (one hour drive) is working well
ingenerating firs-class services at a high caliber level and quality where the
MunicipalGovernments authorities working jointly with basic services enterprises whose goals
are toprovide such services at the most efficient level according to international standard beach
resortworldwide.
The project focus to capture the increasing demand of domestic and international tourism,
withpriority to Guayaquils market (2.8 million inhabitants), Cuenca (Countrys third largest city
inEcuador) and the southern region, which based in the proximity and virtual lack of
similarproductive units, they constitute an assured market for this project.Otherwise, the
decreasing of emissive tourism (moving of national travelers toward interior), asa consequence
of imperative economic conditions in Ecuador and Worldwide (inflation, increase
of international ticketing, hotel and other services tariff, etc.) incites and tends domestic
tourism,with positive demand for this project.Playas already have a social and cultural Identity;
and its community supports, participate,collaborate, and offer the best of its attractiveness and
resources, and these are:
Sun and sea Natural Atmosphere Modern city Social prestige Kindly people
Restaurants Hotels Aquatic sports, etc.
Besides, Playas counts with a well-maintained connective inter-county, regional, national
andinternational vial net. On this vial infrastructure exists a good urban transporting system,
inaddition to the first-order air and maritime transportation.
Front the point of view of the economic and competitive activities Salinas also counts with
thebest infrastructure of Santa Elena Peninsula to lend the corresponding services for
commerceand production, supported at the same time, by the establishment of micro-firms that
boost theeconomic growth among all existing social classes.
Peninsular Tourist Free Zone.This project will be benefit from, in a medium term, of the planning to establish a Free Zone
ofTourist Services that will be in charged to promote and develop the provision of services
intourist activities. These will destine to receptive tourism and in a manner to subside the
nationaltourism. The Free Zone will allow an ample development for facilities and access with
thecurrent ones, such as: basic services, air transportation, land and maritime
transportation,telecommunication, internet, etc. Where the interior and exterior infrastructure
will accomplishwith the designs, technical characteristics, and standards determinate to be
effective to execute
Jointly, as well as, strictly perform the environmental and conservation standards.
The services that will be established in the free zone they will accomplish with the
requirementsof the regulating tourist organization. Those activities to be established are:
Travel Agencies of receptive tourism Travel Agencies of national tourism Operator
ofRecreational Tourism Aquatic Sports Ecotourism Sport Fishing Food and
BeverageEstablishments Tourism Information Handicrafts and Gifts
AccommodationEstablishments
The projects benefits and advantages that will be provided under the roof of the Free Zone
Lawwill encourage major efforts of competition and it will generate a high rate of jobs and to
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boostthe skill labor in this zone of Ecuador. This will also encourage the national and
foreigninvestment, focusing to a sustained and sound development.
Accommodation System Offers and Recreational Sites in Guayas Province (3.5 MillionInhabitants)
Guayas Province accounts with 291 hotels resources of which 47 corresponded to real hotelsand
the rest corresponded to lodging establishments and services. 50.2% of hotels areconsidered of
first category and luxury and 49.8% of establishments belonging to second, third and forth
categories.
The increasing tourism facilities demand is very widely noticed, not only during the beach timeon
weekends and holidays, but during the whole year there are a big number of visitors
fromdifferent zones of the country and besides foreign visitors with limited numbers due to the
lackof hotel infrastructure and recreational center or sites of first categories.
The coastal rim of Guayas and Santa Elena provinces has became the main tourism zone ofthe
country during the whole year. This developing is based and having as principal actor theprivate
and free enterprises whos lately have constructed three new clubs with uniqueparticularity.
The creation of these large clubs will increase the attraction for new thousands of
tourism,including common citizens, who will not have to spend vacations in other countries, but
to stayin exotic places near their domiciles in Guayaquil.
In the same zone currently are operating the following tourist attractiveness: San
Vicentethermal Bath, Salango Petrified Forest, Machalilla National Park (Indian museum), Isla
de laPlata (Silver Island), Ensenada de Ayangue, Olon Beaches, Montaa Surfing, besides
thereare many Indian archeological centers like Guangala, Real Alto, Las Vegas, Chorrera
andValdivia cultures.
Summarizing, our named Costa Azul Zone (Blue Coast) counts with ideal beachescomplemented
by the beauty of Pacific ocean and the presence of traditionally people whereflourished our
ancient Indian cultures full identified with Ecuadorian roots, as well the surging ofresorting towns
and cities of great urban development. The Ecuadorian Costa Azul (Blue CoastRim) belonging to
Santa Elena and Guayas Provinces offers a good number of enchanted andfascinating places that
assures rest and rejoice of all kind of visitors.
From the geographical point of view, there many beach towns around this area offering a
widevariety of entertainment to move and change of sites easily and close each other, and
putting inpractice any initiatives for visitors from sport fishing, surfing, yachting, tennis, scuba,
etc.
Naming these towns from the southeast: Posorja, Data de Posorja, Data de Villamil,
Chanduy,Ancon, Punta Carnero, Salinas (Biggest Developing Beach Resort), La Libertad,
Ballenita,Punta Blanca, Capaes, and San Pablo.
Facing further north there are: Palmar, Ayangue, San Pedro, Valdivia, Manglaralto, Montaita
yOlon, all this sites are located right on the beaches are linked together by the highway
calledRuta del Sol (Sun Route). The called blue coast, in the circuit from Salinas to Puerto
Lopez, inManabi province, offers an attractive variety of tourist wealth, to known and visiting it to
meetwith emotions, peace, sun, handicrafts, and walking by beaches and woods, extreme
sports,observation of birds and whales, dawn and warm sandbank. Without doubts this
zonerepresents an enormous tourist potential for our Blue Coast province of Guayas. This
means
an increasing demand of dozens of thousands of potential visitors and potential buyers for
thevillas of our housing project that definitely assured the repayment or return of capital
investmentin project like proposed by (name of the company)
International Seafront.- In our project we offer the construction of a vehicular and
pedestrian,of restricted use, establishing regulation for the opening of commercial
establishments. All willbe organized for the maintenance of seafront itself. This project will count
with severalcomplementary services and precise co-projects, such as handicraft market; areas of
skating,biking, walking, etc. Besides, areas of parking, rest rooms, showers and playing sports
onbeaches. This seafront will be constructed under a concept of an open big commercial mall,
thismeans the development of other services in encircled areas such as the following:
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Ecuadorian Tropical Garden.- Additionally, artificial lakes will be constructed in an area of

2.5hectare, including summing pools with mechanically generated-waves and toboggans,
forminga great familiar recreational center. In another area of 12.5 hectares, with the technical
advisoryand patronage of Tropical Garden of Miami, Florida, we are going to construct a large
garden,including the their seeds and our rich native flora seeds and a mini zoo with the native
zonefauna.
Center of Art and Culture.-This type of center will be also constructed where national
andinternational festivals for special series of performances as the well-known in Via del Mar
andAcapulco. Complementary and related service to these activities, are going to be patronage
andperform, such as movies, exhibits, conventions, seminars, etc.
Playas-Engabaos beaches, although the infrastructure works to be performed and carry out
todevelop this project, and special care will be kept to preserve the natural status of the
beachesby definition are geometric places to equilibrate the earth and ocean, in order to
preserve thisequilibrium, it is necessary to preserve the beach under the best natural
conditions.It is necessary to point out that the sea does not supply solids, this concept is
importantbecause the following reasons:
This Playas-Engabaos project will constitute the future main tourist center of Ecuador, and ithas
gained by its natural beauty of the beaches, under these conditions and circumstances,
theproject considers, under the single concept that the whole city of Playas-Engabao, includes
the seaside resort, the seafront and the beach. The projects technical team force is
underperiodically observation of the affected beach in this project and to accomplish these tasks,
theProjects Task Force Team will have a sea environment quality laboratory, equipped
toundertake the physical, chemical and biological analysis on sediments and water, as well as
the
needed field instrumentation. Also, it will have an electronic and instrumentation workshopwhich,
in addition, will provide services to other units of the city of Playas-Engabao.
The Projects main consideration is the creation of a Center of Studies to aim at developing
longterm statistical analysis on marine climate (waves and wind). It also applies numerical
models ofmarine hydrodynamics to the studies on beaches and port coastal engineering.
Knowledge ofthe wave climate is a prerequisite in most of the studies of the coastal areas, since
it is the mainagent in the evolving dynamics of the coast and a key action to be considered in
theregeneration in coastal structures and beaches. The objective of this Center is to maintain
therelative information as up to date as possible in the techniques for wave
characterization,needed for the different types of studies, as well as to contribute to the
development of thisdiscipline as much as possible. The Project will consider the numerical
models of marinehydrodynamics are today worldwide and in certain areas a highly competitive
tool in comparisonto the physical models from the point of view of cost, execution time,
versatility and quality ofresults. The Projects Task Force Team will make extensive use of models
of wavetransformation in coastal zones (refraction, refraction-diffraction), wave disturbance
within the
beach and long wave analysis.
Coastal Studies
The basic goal of the Coastal Studies to be consider in this Project is to support project
himselfand others one for the defense and protection of beaches. This is accomplished by a
directcollaboration in the design of these projects and the maintenance of the basic
informationneeded. The Project also will try to keep our country up to date in the techniques
used in thisfield. This is going to be a pioneer work and studies in the protection of its coastline
and in theregeneration of beaches, this activity is an extraordinarily young branch of civil
engineering,which requires a significant effort in basic and applied research.The activity of this
sector of the Project consists of four basic areas: Coastal dynamics studies,whose aim is to
progress in the knowledge of the transport processes which lead to beachevolution. Beach
regeneration projects and management techniques.Monitoring of regenerationprojects with
topographical and bathymetric measurement campaigns and evolution analysis.Advanced
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measuring in the marine environment and setup of new equipment and systems forcoastal
monitoring.
To undertake this work, this part of the Project will need to have, among other tools, a data
bankwith aerial photographs of the Ecuadorian coast and of the shoreline position in sandy
coastsfrom 1970 till the present. It also is going to look for software for the calculation of
sedimenttransport along the shore and the evolution of the shore in its plan-shape and profile
underwave action. In the future, a special effort is going made within the part to apply
GeographicalInformation Systems concepts and tools in the coastal area.
A good part of the activity of the Project will depend on the collection of data in the field. For
thispurpose the Center of Studies will have boats, sounding equipment and various
fieldinstruments, as well as a workshop for sedimentological analysis.
(Company name) backed under legal contract by (Constructing company), has proposed to
theMunicipality of Playas-Engabao to provide all the technical support and environmental
impactstudy of this project that allow the protection and natural conservation of the affected
virginbeach considered in this project, which such projection that goes further: To convert PlayasEngabao beaches, into beaches that will be rated or classified ones as Blue Flag which
isgranted by World Organization of Tourism (WOT). This distinction is granted to beaches basison
mainly for Excellent Quality of the waters, good infrastructure, appropriated services, a
correct environmental management and control of the natural conditions and fundamentally
asustainable maintenance program of the beach, and not only a cleaning and recollection
ofwaste system, but a hygienic and oxygenation process of dunes.
Besides, The Municipal Government of Playas-Engabaos authorities leading by its Major isagreed
and engaged in developing jointly with (Promoting Company name) this project ofcontrol and
protection of the beaches and the construction of the new malecon, with a globalvision
considering the following:
The control and protection of the beach of the city of Playas-Engabao must be complemented
with the protection of the seafront, not only because they should form a sole concept,
butfundamentally to constitute the best financial feasibility, based in on tax services, to be
collectfor the infrastructural civil works to be done by such urban construction development. This
willallow recuperating an important segment of the credit amortization obtained for the
constructionof the same. To reinforced and assure this feasibility, a Municipal concession contract
will becelebrated between the Municipality of Playas-Engabao and the promoting firm of this
project.
The legal tool to frame regulating between the private investment sector, in the present case
thecompany (name of promoting company), and Municipality of Playas-Engabao is the
concession which also will assure the returns of the investment through the collection
ofmunicipal taxes. This type of contract give (promoting company name), the possibility
andsecurity to managed these aforementioned fundamental aspect in the concession. This
hasbeen our proposal to the Municipal Government of Playas-Engabao which has been also
accepted by the authorities of the Municipality.
The Economy of Project
The tourism movement is of great importance to the local economy. With 150,000 Visitorsyearly
and with earnings of around $3 million. Tourism together in action with housingdevelopment is
the major foreign currency earner and major provider of employment. There isno doubt that the
tourism and housing development industries have contributed enormously tothe economy of the
Republic of Ecuador and to the standard of living of the people.To cater for this increase in
tourists and housing development in Playas-Engabao, the demand of number of hotels and
hosing need to shoot up to provide comfort and firs-class
accommodations and medium-class income villas to supply the current demand period.
Themajority of hotels and hosing development have been built on the coast of Playas
Databecause the main attraction for tourists in Playas - Engabao is the sea and its beaches.
TheHousing Development and its complementary constructing development is located along and
infront of the beach of Playas- Engabao covering 1,800 hectares (18 Millions square meters),
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thecenter of the resort, and account with the fact that the most beautiful and scenic beaches are
tobe found around at those locations.
As the number of arrivals of tourists and new inhabitants are expected to increase steadily
overthe next few years there is considerable pressure from property developers to obtain
permissionfrom government for the construction of more hotels and housing development
around thecoastline.
In view of the fact that due to an increase in numbers of visitors and the floating population,more
and more people spend time at the seaside on weekends and holidays, there is anincreased
demand by the public for more public beaches and better amenities on site and, ofcourse, new
construction of villas. This obviously conflicts with the demand from propertydevelopers for more
sea frontage. In our case, the project account with its own housingdevelopment and territory.
The further development of tourism will require on behalf of government new policies that
canreconcile the legitimate demands of the population for more leisure amenities and that of
thetourism and housing construction development industries. In that perspective, the
government isencouraging the development of inland tourism and eco-tourism. The idea is to
encouragetourists to visit the interior of the Playas-Engabao beaches and its sites.
Etanolsa S.A. , Promoting Company.
The projects promoting company is owned mostly by (names of partners) who are wellknownamong local commercial, social, and banking circles. Mr. Wellington G. Gallardo, President
and CEO who accounts with a vast experience in the construction field, well-known in local
commercial/business circles.
Housing Construction Development: The company is willing and ready start preparing
themovement of lands and soils covering 18 Millions square meters and at the same time
planningsales packages for the villas that it including sales tours in Playas-Engabao beaches and
it isbeing trialed for a further year before being commercially marketed. The various natives of
thecommunities have been involved in consultation and discussion about the type of
housingconstruction development and involvement that they want. Infrastructure needed along
the way(toilets, water supply, and accommodation) has been carefully planned . Two different
drivers,each with their own vehicle, have been contracted for the tours. The vehicles are
comfortablecarry 8-14 domestic visitors and 50 for international tourists.
How to Develop the Product :The native communities participating in the tour have
identifiedthe features of the environment and their culture, visiting the local museums, that they
want topresent to tourists, and the individuals who are best able to act as guides. Some
danceperformances are being developed for tourists. Initially, much of this participation is
supportedby the projects promoting companys payments. All the participants are receiving
guidance andtraining, though much of this is on-the-job, given the remoteness of the
communities from ourown training force team. Some key native people with experience in the
sales industry have been involved from the start in providing advice and training others.
A separate commercial organization is being established to operate the tour for selling the
villas,with involvement of the participating communities. The Sales tour will be originally planned
as asingle five day event starting in Playas to Engabao and returning to Playas, with a maximum
of50 kilometers being traveled each day.
Networking : Travel Agencies based mainly in Guayaquil, will coordinates the sales tours andact
as affiliated company works in co-operation with the Ecuadorian Tourism Association, and
therefore the promoting construction company has good links with the mainstream tourist
industry and potential buyers to become inhabitants of the covered area for this project. There
isa great deal of industry support for the development of native tourism in the Playas-Engabao
region.
There will be good attraction and success in attracting corporate sponsorship for
somecomponents of the infrastructure being provided for the sales tour. The Sales tour, starting
atPlayas, will include use of mainstream accommodation and restaurant facilities along the
15

route.However, it is expected that in time more of the accommodation will be provided by

theindividual communities.
Marketing :The Sales tour for the villas is seen as appealing to the international market, as well
as to educational markets in Ecuador (including universities, mining companies, bigcorporations,
different labor associations and others). Some markets may prefer the shorter 3day tours rather
than the full five day tour.
Problems that have been encountered :The main problem has been in securing
fundingsupport over the length of time that it has taken to develop the tour. It was necessary to
proceedat a pace which suited the communities involved, and to ensure that everything was fully
testedbefore marketing it. We are enthusiastic in marketing the tours with the funds available in
theinternational private sector which is the main aim of this project.
Future Prospects :The development of housing construction is seen as only one componentof
each community's tourism involvement. Individual community groups are seen as being freeto
pursue their own tourism operations on a day-to-day basis and in conjunction with
other(mainstream) tour operators, as they gain skills and confidence. Other community groups
areexpressing interest and wanting to become participants in the sales tour. However, there is a
practical limit on manageable numbers. It is possible that other tours may be developed
withdifferent communities, in due course.
Financial Scenario of Project.Total Loan Amount: US$460 Million Dollars
Term: 20 years, with 3 years of Grace Period
Interest: Libor plus 1% Annually, with 3 years of grace period
Guarantee: The Projects Promoting company put as collateral the property covering 18Millions
of square meters appraised at US$20 dollars before the added cost of investment totaling
US$180 Millions dollars. Additionally, the Royalty, Municipality of Playas-Engabaos Concession
on the use and services of the Beach and its Seafront during 25 years. Local Municipalities will
issue two series of Municipal Bonds, one series of Major-bonds with a face value of
US$10,000,000.00 totaling US$460,000,000.00, represented by 460 Municipal Banks, to be
place in a local commercial bank with fully bank responsibility as a collateral, and a second
series of 4,600,000 Municipal Mini-Bonds with a face value of US$100.00 each plus 4,600,000 a
US$1.00 coupon value each totaling US$4,600,000 Dollars.
Distribution of Loan: US$10 Million for the Construction of the Playas-Engabaos
Seafront;US$10 Million for the preparation of land and soils. US$440 Million for the complete
construction of the 20,000 villas will be constructed by stages of 5,000 villas, until reaching the
total construction of the 20,000 or 4 stages.
Prepared by Wellington G. Gallardo, Ciudadela. Los Esteros, Manzana 29, Villa 4, tel.
(5934)2422511, Playas Phone: (5934) 2764042, Cel. Phone (5939) 89502692, e-mail:
finangallardo@hotmail.com, Guayaquil, Ecuador.

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