The Inter-American Development Bank (IDB) has approved a $100 million Conditional Credit Line for Investment Projects (CCLIP) to boost corporate productivity in Uruguay by fostering innovation, entrepreneurship, research and human capital.
This credit line includes an initial $25 million loan to help consolidate public policies on Science, Technology and Innovation by providing technical and financial support to the National Agency for Research and Innovation (ANII, after its Spanish initials), which will be the program’s executing agency.
The operation aims to rise private investment in innovation. To this end, it will focus on two major goals: strengthening early-financing availability for innovative ventures, and increasing the offer of advanced human capital in an effort to meet the demands of the productive sector. It will also provide support to ANII’s institutional capabilities to achieve these goals.
The loan’s lines of support include validation of new technologies and innovative business ideas, seed money for innovative ventures, business incubator services, support for early investment funds management, and public-private co-investment of these funds in innovative undertakings. In addition, it will finance student grants for master’s and doctoral courses both at home and abroad, mechanisms for national and international circulation of talent, and the insertion of postgraduate students in Uruguayan companies embarked on innovative projects.
While Uruguay’s national innovation system has significant strengths such as political stability and adequate legal framework and information technology infrastructure, there are other areas where it is lagging behind—R&D investment is only 0.36% of GDP, way below that of successful economies (3.9%), while a merely 30% if this investment comes from the private sector, compared with 60% in more advanced countries.
Some of the main obstacles that private investment in R&D face in Uruguay are lack of financing for innovation and innovating ventures, limited supply of advanced human capital, low level of collaboration between universities and industries, and a failure of research efforts to focus on the country’s challenges, among others. Bridging these gaps requires long-term policies and stable financing in order to strengthen institutional capabilities.
The loan is for a 25-year term, including a 5.5-year grace period, at a LIBOR-based interest rate.
About the IDB
The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.