The second of two operations will improve the effectiveness of public spending, quality of information, and increased subnational revenues
Colombia will continue to strengthen its subnational fiscal stability through more effective use of public resources, improved quality of information on revenues and expenditures, and increased subnational tax revenues, with the support of a $100 million loan from the Inter-American Development Bank (IDB).
The program aims to strengthen systems for promoting the best use of public resources and accountability to consolidate the process of decentralization and fiscal capacity.
The operation―the second in a series of two―will put in place a strategy for monitoring, follow-up, and control of the General Participation System through its application in at least 32 departments and 31 municipal capitals. The strategy will result in the adoption of a single system of sectoral indicators for rating risk events in the use of resources by subnational entities.
Another program objective is the inclusion of a section on fiscal sustainability in at least 20 municipal capitals for the evaluation of fiscal and financial risks of subnational decentralized entities.
The IDB loan has a repayment period of 20 years, a five-year grace period, and an interest rate based on LIBOR.