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New IDB loans for Trinidad & Tobago total US$130 million for climate change and financial sector strengthening

The Inter-American Development Bank (IDB) approved a total of US$130 million for Trinidad and Tobago, including US$80 million for climate change measures and US$50 million to strengthen the financial sector.

“IDB lending and technical assistance to the country is expected to total around US$1.5 billion from 2011 through 2015, with a focus on the country’s ambitious reform program,” said IDB Representative in Trinidad and Tobago, Iwan Sewberath Misser. “Our operations support public sector management, financial sector regulation, private sector development, education, social protection, climate change, energy, water and sanitation, and transport.”

In 2011, new financing for the country totaled US$290 million.

For 2012 the IDB will place an emphasis on the rehabilitation of the waste water systems, solid waste management, infrastructure improvements, local government reform, and in assisting with the rationalization of State Owned Enterprises (SOEs) through the public offerings program in Trinidad and Tobago.

The two loans approved are the following:

Climate Change

A US$80 million loan will help Trinidad and Tobago to incorporate the consideration of the impact of climate change into national policies and institutions.This initiative will also promote carbon markets and policies to reduce greenhouse gas emissions.

“The program will strengthen and modernize the regulatory, institutional and policy framework to develop and promote instruments to assess and reduce vulnerability and risks associated with climate change,” said IDB team leader Gerard Alleng. “Mitigation and adaptation measures will be key in an island state highly vulnerable to the impact of global climate change.”

Financial Sector

A US$50 million loan will strengthen the financial sector supervisory and regulatory framework.

“Trinidad and Tobago is considered the regional financial center for the English-speaking Caribbean,” said IDB team leader Juan Antonio Ketterer. “This program will focus on reinforcing macroeconomic stability to minimize the probability of exposure to any future vulnerability or systemic crisis.”

The Ministry of Finance will be in charge of both projects. The loans are for a 20-year term, with a four-year and five-year grace period respectively, at a variable interest rate based on LIBOR.