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Cofinancing for IDB projects reaches $2 billion in 1999

The Inter-American Development Bank obtained $2 billion in cofinancing for social and economic reform as well as for infrastructure projects and emergency relief programs in Latin America and the Caribbean in 1999.

Cofinancing is a major instrument to support the Bank's own lending program. In 1998 IDB projects attracted a record of $3.535 billion from outside sources.

Japan was the IDB's main source for bilateral cofinancing for the fifth year in a row, while the World Bank was its biggest multilateral contributor.

In recent years external support was especially generous in helping Central and South American countries that were hit by natural disasters such as the floods triggered by Hurricane Mitch and El Niño and by turmoil in global financial markets.

Bilateral sources

Japan once again stood out last year as the principal provider of untied funds, contributing $592 million for five IDB-backed projects. In 1997 Japanese cofinancing had reached a record of nearly $1.5 billion.

The two most important sources of Japan, the Export-Import Bank of Japan and the Japanese Overseas Economic Cooperation Fund merged during the year into the Japan Bank for International Cooperation. In 1999, JBIC provided a total of $500 million of untied funds for two projects: $200 million to support the second program for the improvement of small and medium-size enterprises in Peru; and $300 million for the third stage of the National Development Bank (BNDES) Multisector Credit program in Brazil.

The Japan International Cooperation Agency (JICA) helped to rehabilitate bridges and water systems destroyed by hurricane Mitch in Honduras and Nicaragua with grants of $56 million and $10 million, respectively. JICA also granted $26 million in parallel financing to expand and modernize the water supply and distribution system in Managua, Nicaragua.

The Government of Spain financed the rehabilitation of the Pan American highway in Nicaragua with a $16 million concessional loan. The International Cooperation and Development Fund of Taipei provided $7.7 million on concessional terms for the solid waste management program in El Salvador.

The Swedish International Development Cooperation Agency also financed the reconstruction of bridges damaged by Hurricane Mitch in Honduras with a grant of $35.8 million.

Multilateral sources

The World Bank contributed $1.3 billion in cofinancing for projects sponsored by the IDB: $1 billion went to support the emergency package for Brazil’s Social Protection Reform; and $300 million supported Peru’s Financial Sector Reform.

The European Investment Bank cofinanced the electric interconnection project (SIEPAC) of Central America with $40 million.

The Caribbean Development Bank provided $8.3 million to improve Belize’s capacity to respond to natural disasters.

The Organization of Petroleum Exporting Countries Fund, which provides concessional and untied resources, contributed a total of $22 million for four programs: $8 million for health sector development in Peru; $5 million for water and sewerage services in Nicaragua; $5 million for the emergency road and water supply infrastructure program in Honduras; and $4 million for infrastructure development in Jamaica.

The Nordic Development Fund supplied a $6.9 million interest-free loan to cofinance the Ventilla-Tarapaya’s highway and $6.9 million for the epidemiological shield and health sector reform program, both in Bolivia; and $2.1 million for Honduras' potable water and sanitation investment program.

The Norwegian Agency for Development Cooperation granted $1.8 million to strengthen the management of social policy in Nicaragua, a project executed by the IDB’s Institute of Social Development.

Also during 1999, the Bank and the Government of Sweden signed a framework agreement establishing the bases for cooperation in the financing of development projects.

For further information, please contact Christophe Guillemin, the Cofinancing Division's chief and principal coordinator, at (202) 623-2914 or by e-mail at

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