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After nearly five years of suspension, Japan will resume official yen loans to Colombia to help the Latin American country rebuild its shattered economy, government sources said Tuesday.

The decision will be announced at a meeting of aid donor countries and organizations to be held Friday in Madrid to discuss international assistance efforts for Colombia, the sources said.

Mitsuo Sakaba, deputy director general of the Foreign Ministry’s Central and South American affairs bureau, will head the Japanese delegation to the Madrid conference.

The conference will be held ahead of the Okinawa summit of the Group of Eight major countries, at which the G8 leaders are expected to agree on the need for international assistance for Colombia.

The summit of the G8 nations — Canada, Britain, France, Germany, Italy, Japan, Russia and United States — will be held for three days starting July 21.

The Japanese decision to resume low-interest, yen loans to Colombia is apparently aimed at demonstrating the country’s strong resolve to assist the Latin American country at the Okinawa summit.

The sources said that Japan will disburse about 7.6 billion yen in official loans to Colombia during fiscal 2000 for an agricultural development project in the Ariari River basin in the province of Meta.

Although Japan and Colombia exchanged official notes on the yen-loan program for the farm project in fiscal 1995, Japan has not yet handed over the money due to deteriorating security conditions in Colombia.

In addition to the resumption of official loans, Japan will also announce at the Madrid conference fresh assistance measures for Colombia in various areas through the provision of grants-in-aid and technical cooperation.

Japan has kept its status as the world’s largest aid donor for nine consecutive years. Yen loans, grants-in-aid and technical cooperation constitute Japanese official development assistance extended bilaterally to developing countries.

Although the Madrid conference is formally not supposed to be an aid-pledging session, its success is widely seen as the key to the future of Colombia’s ambitious, multibillion-dollar development program.

Plan Colombia, as the program has been dubbed, was announced in September by President Andres Pastrana as a comprehensive strategy to address several “challenges” facing the country.

Among those challenges are a crackdown on drugs, lasting peace with leftist guerrillas, judicial reform and democratization, revitalization of the economy and promoting social development.

The Colombian government estimates that Plan Colombia will require $7.5 billion in funds over the next three years. While planning to pay $4 billion itself, Colombia has asked the international community to contribute the remaining $3.5 billion. Pastrana and other top-level Colombian officials have traveled around the world to sell Plan Colombia.

The U.S. administration of President Bill Clinton was quick to respond to the Colombian assistance request, pledging $1.6 billion in aid, including the provision of military equipment, to crack down on drugs in areas controlled by leftist guerrillas. For the United States, curbing the inflow of drugs from foreign countries, especially Colombia, is a top foreign-policy goal.

Before Pastrana took office in August 1998, relations between the U.S. and Colombia deteriorated due to a drug-related campaign-financing scandal involving his predecessor. But the Clinton administration has strongly backed Pastrana, who, helped by his clean and fresh image, won the presidential election by the largest vote margin in Colombia’s history.