Inter-American Development Bank President Luis Alberto Moreno today congratulated Haiti for completing a process that will allow the Caribbean country to receive more than $1 billion in debt relief from international financial institutions and donor governments, including some $511 million from the IDB.
Earlier, the International Monetary Fund and the World Bank determined that Haiti had reached the so-called “completion point” of the Enhanced Initiative for Heavily Indebted Poor Countries (HIPC) and qualified for full benefits under the Multilateral Debt Reduction Initiative.
“This clears the way for the IDB to provide Haiti some $511 million in debt relief,” Moreno said. “The Haitian government and its people will have a historic opportunity for a fresh start, as they will be able to devote more resources to fight poverty.”
The debt relief, which combines the cancellation of loan principal and future interest payments, had been approved by the IDB’s Board of Governors in March 2007, subject to Haiti’s finishing the HIPC process, under which governments agree to meet a set of economic and policy targets.
Underscoring Haiti’s achievement, Moreno noted that its government had succeeded in maintaining macroeconomic stability even after last year’s devastating hurricanes and a spike in oil and food prices, as well as the whiplash from the global economic crisis.
While Haiti endeavored to complete the HIPC process, the IDB provided its government interim debt relief totaling $34 million between 2007 and mid-2009. In addition, during that period the IDB approved over $100 million in grants for Haiti to support projects in key sectors such as infrastructure, agriculture, water, electricity and education.
Over the rest of this year and 2010 the IDB could approve up to $250 million in new grants for Haiti, where it is currently carrying out 23 projects with a total budget of $700 million, the largest portfolio among multilateral agencies active in the country.
In recent years the IDB has seen encouraging progress in its portfolio, as the Haitian government strengthened its capacity to execute projects. In transportation, for example, nearly 200 kilometers of roads have been repaired. Work on 140 kilometers more should be completed by 2011 while improvement of 180 kilometers more is scheduled for 2012.
In agriculture, the IDB has helped Haiti expand irrigation in the Artibonite valley, its main rice-growing region, from 14,000 hectares to 22,000 hectares during the dry season. In energy, funding from the IDB will assist the state power company EDH in boosting its generation capacity through the rehabilitation of the Péligre hydroelectric plant.
Moreno added that he looked forward to meeting Haitian President René Preval and Prime Minister Michèle Duvivier Pierre-Louis later this month when IDB governors from the Caribbean region hold a conference in Port-au-Prince.