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IDB approves credit line for technological innovation program in Argentina

The Inter-American Development Bank has approved a conditional credit line for investment projects (CCLIP) for Argentina, to help finance the country’s Technological Innovation Program. The credit line consists of three financial operations for a total $750 million over the next five years.

The first operation, for $100 million, was approved to come in effect immediately. The two  remaining operations would be considered by the Board to come into effect in 2011 and 2013.

The program will help strengthen Argentina’s National Innovation System (Sistema Nacional de Innovación, SNI), which was developed mainly with IDB financing during Argentina’s previous technological modernization programs carried out between 1999 and 2006.

The operation will provide continuity to those programs, building on their achievements. The Argentine government has turned the former Office of Science and Technology into a ministry, signaling the importance of technological development in the country’s quest to become a modern and innovative society.

“This new operation builds upon a foundation of learning, accumulated experience, and a solid institutional buildup aimed at transforming Argentina into a knowledge society,” said the IDB’s project team leader, Juan Llisterri.

Though investment in research and development in Argentina has risen from 0.4 percent of GDP in 2003 to 0.51 percent in 2007, it remains below average for countries with a similar level of development, and very distant from the OECD countries, that invest an average of 2.3 percent of their GDP in science, technology and innovation.

One of the key components of the program is the creation of Sector Funds for Technological Innovation, aimed at developing capacities to generate and incorporate high-tech innovation in strategic sectors of the economy and Argentine society, through high-impact projects that address problems in each sector. This component will finance the creation of four Sector Funds for Technological Innovation in sustainable energy, health care, agroindustry, and social sectors.

The program will continue helping private companies invest in science and technology to make them more competitive, through the financial instruments of the Argentine Technological Fund (FONTAR), as well as promoting research with the Science and Technology Fund (FONCYT).

The program’s third component will cater to the physical infrastructure needs of institutions devoted to research, development, and innovation.

The IDB financing emphasizes the program’s impact evaluation and results measurements, conditioning resources to the accomplishment of intermediate goals.

Some of the expected results are a 10 percent increase in private investment in technological innovation as a proportion of sales, to be accomplished by the project’s fourth year, and a sustained increase in the number of scientific publications by researchers supported by the program.

The credit line was approved for a 25-year period, with a 5-year grace period, and a LIBOR-based interest rate.

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