Chile Launches Reforms for Sustainable Growth Backed by $250 Million IDB Loan

WASHINGTON -The Inter-American Development Bank (IDB) has approved a $250 million policy-based loan to support Chile’s reforms to boost its competitiveness and sustainable and inclusive growth.

This operation, which has been approved by the IDB's Board of Executive Directors, aims to accelerate the digital transformation of public services and connectivity, drive a transition to circular production models, and increase formal employment by supporting micro and small enterprises and the labor force.

The program includes measures to expand the country's digital infrastructure, for example, by approving the National Data Centers Plan. It also aims to strengthen the institutional framework for state digital transformation, including by developing a strategy with accessibility guidelines for people with disabilities.

For sustainability, the program will work to increase recycling of industrial and construction waste and introduce policies to make the mining sector more circular.

The program will also promote policies to boost formal employment and build the capacities of micro and small enterprises. Key initiatives in this area include structuring a new wage subsidy system and implementing a national strategy to improve job matching and training. These actions are designed to increase productivity, reduce informal employment, and narrow gaps in access to formal employment, especially for women, young people, and people with disabilities. This program will benefit the Chilean economy and society as a whole by accelerating the digital transformation and reducing transaction costs for the central government and citizens.

Micro and small enterprises will experience higher productivity and formal employment, while companies and people of working age will benefit from a stronger job matching system.

This operation complements and builds on the progress of a previous $100 million policy operation approved in 2021 to enhance the country's competitiveness.

The $250 million IDB loan has a 20-year repayment term, a 5.5-year grace period, and an interest rate based on SOFR.