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IDB doubles grants to Haiti to US$100 million for 2009

The Inter-American Development Bank will double its grants to Haiti to US$100 million for 2009 in order to help the Haitian government make vital investments in social and economic programs, IDB President Luis Alberto Moreno announced today.

Moreno, who is traveling to Port-au-Prince this weekend to meet Haitian President René Préval, added that the IDB Board of Governors also approved US$14.15 million in interim debt relief for Haiti for the first half of 2009.

 “Haiti is the most fragile of our member countries. No other nation in Latin America and the Caribbean is as vulnerable to economic shocks and natural disasters,” said Moreno. “As such, it requires extraordinary assistance from the international community.”

Haiti stands to obtain full cancellation of about US$525 million in scheduled principal and interest repayments to the IDB once it completes the multilateral debt relief process known as the Enhanced Initiative for Heavily Indebted Poor Countries (E-HIPC).

Noting the Haitian government’s efforts to improve economic and financial stability – even as the country was hit by rising food and fuel prices and four major tropical storms earlier this year – Moreno said he hoped Haiti will finish the HIPC process in mid-2009.

The increase in the grant resources for Haiti was made possible by an agreement among IDB member countries to shift administrative costs from the IDB’s window for concessional lending, the Fund for Special Operations, to the Bank’s Ordinary Capital, the source of most of its loans.

The IDB has been providing Haiti US$50 million in grants a year since 2007 under a previous agreement to reduce the debts of the poorest member countries in Latin America and the Caribbean.

In talks with the Haitian government on how to invest the additional grants for 2009, the IDB has preliminarily allocated US$20 million to the FAES social investment fund, a government agency with a strong record of success in carrying out community-based projects such as building local water systems, refurbishing schools and improving rural roads.

Another US$15 million would be devoted to potable water and sanitation projects in the cities of Gonaives, Port de Paix, Les Cayes, Ouanaminthe and Saint Marc, assigning the additional resources to the reconstruction of urban drainage systems, which are fundamental for mitigating the impact of flooding triggered by tropical storms.

A further US$12.5 million would be provided as budgetary support in order to give the Haitian government more flexibility to meet expenditures. These resources would complement another US$12.5 million grant the IDB planned to make next year for the same purpose. The remaining US$2 million would support a child nutrition project targeted at the poorest and most vulnerable families, in coordination with other donors. 

In addition, the IDB expects to approve a US$25 million grant for Haiti’s ongoing program to improve highways and rural roads across the country. Another US$13 million grant would finance a natural disaster mitigation program in the country’s main watersheds.

During 2008 the IDB provided Haiti grants totaling $50 million for roads, budgetary support and the rehabilitation of the Péligre hydroelectric power plant, the country’s principal source of low-cost, low-emissions renewable energy.

The IDB’s Representative in Port-au-Prince, Philippe Dewez, said the extra resources would be a timely contribution as the Haitian government has significantly boosted its capacity to execute development projects. This year the IDB is on track to disburse some $128 million from its portfolio of operations in Haiti, doubling the amount disbursed in 2006.

Besides projects in transportation infrastructure, potable water and electricity, the IDB is financing programs in agriculture, education, health and job training. In addition, it is helping the Haitian government modernize key agencies, including its tax and customs bureaus.

During his visit to Haiti, Moreno will present donations totaling US$48,800 from the IDB and its staff for the victims of a school that collapsed in November and for two NGOs that run schools and programs for children with disabilities in Port-au-Prince and Gonaives.

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