Chile to Enhance Public Procurement with IDB Support

The Inter-American Development Bank (IDB) approved a $20 million loan to Chile to boost the efficiency and transparency of the country’s public procurement.

The IDB’s Program to Improve the Quality of Expenditure in Public Procurement, which has been approved by the Bank’s Board of Executive Directors, will focus on making Chile's public-sector procurement and contracting system more transparent and efficient.

"By strengthening public procurement and contracting systems, states can achieve significant savings, primarily by cutting administrative costs. This frees up considerable resources that can be reallocated to social-spending priorities, which in turn benefits the general public," said María Florencia Attademo-Hirt, IDB representative in Chile.

The program will directly benefit government agencies, ChileCompra and its employees, and public-procurement officers, who will have access to better public-procurement systems and new tools. It will also will benefit state suppliers – especially local vendors, smaller companies, women-led businesses and people with disabilities – through expanded business opportunities and better access to the system.

The first component of the program focuses on strengthening regulatory and organizational aspects of the Public-Sector Procurement and Contracting System and will include steps to disseminate changes to the Public Procurement Law and encourage their uptake. This component will also bolster the Public Procurement Observatory for efficient and effective procurement processes and work to institutionalize ChileCompra’s new powers. 

The program’s second component aims to enhance and upgrade the technological system for public procurement to ensure that it is an efficient and secure platform that can adapt to new regulations. 

The $20 million loan has a 25-year repayment term, a 5.5-year grace period and an interest rate based on the Secure Overnight Financing Rate (SOFR).