The Inter-American Development Bank (IDB) approved a $300 million loan for Jamaica to temporarily compensate for shortfalls in the normal credit flows to the country caused by the global financial crisis.
The loan is from the IDB’s Liquidity Program for Growth Sustainability (LPGS) set up to help Latin American and Caribbean governments alleviate the effects of international turmoil on their countries’ macroeconomic stability, growth, and employment.
IDB President Luis Alberto Moreno and the Jamaican Minister of Finance and the Public Service, Audley Shaw, will sign the loan on Monday, Jan. 19, in Kingston during the president’s visit to that city. Moreno will be in Kingston to attend the conference “Violence Prevention and Citizen Security: Addressing Crime and Violence in the Caribbean Region,” organized by the IDB and the Government of Jamaica.
The IDB loan will provide revolving credit lines to eligible intermediaries operating in the Jamaican financial system. This will help the country maintain its levels of production, thereby protecting employment from a temporary external shock and at the same time reinforcing macro-economic soundness.
The loan is for a five-year term, with a three-year grace period, at an interest rate based on six-month LIBOR plus 400 basis points annualized.
IDB approves reformulation of Kingston water and sanitation project to mitigate impacts of increased food prices
On Jan. 14, the IDB Board of Executive Directors also approved the reformulation of a $40 million loan for a water and sanitation project in Kingston that had been approved by the board in June 2004.
The reformulation allows the government to reorient $15 million of this loan to finance activities that address the increase in food prices while at the same time limiting the country’s indebtedness.
According to project team leader, Leslie Stone, the funds will address the more immediate needs of the most vulnerable population groups and allow the government to maximize the use of these concessional resources. Regarding the water and sanitation project, remaining project funds will allow rehabilitation works to continue in water production and network distribution setting the stage for later implementation of the leak reduction component.
The funds will support the expansion of PATH, Jamaica's conditional cash transfer program, to widen the social safety net and increase the size of the cash transfers for beneficiaries.