CARICOM Development Fund begins full operations

Aug 25, 2009 News

The CARICOM Development Fund (CDF) began full operations yesterday.
The US$250 million Fund is designed to provide technical and financial assistance to those countries, regions and sectors so designated by the Community as “Disadvantaged Countries, Regions and Sectors”. Guyana is included among the countries to benefit from the Fund.
The CDF was established under Article 158 of the Revised Treaty of Chaguaramas which established the Caribbean Community (CARICOM) and the Caribbean Single Market and Economy.
Yesterday’s date for the commencement of full operations of the Fund was set after the 5th Regular Board Meeting approved the regulations and procedures which will govern the operations of the CDF.
Among the governance rules and procedures approved were the Appraisal and Disbursement Procedures & Guidelines and the Procurement Procedures. Both of these define the rules related to the CDF’s consideration of requests for grant or loan funding and related procurement activities.
In determining the targets and ratios that will condition disbursement, the Board took into consideration the current level of CDF capital fund which now stands at US$77.7 million. It also considered the sustainability of the capital fund, the need to turn around project requests within three months, and issues of equity which will ensure that all eligible Member States have a reasonable expectation of accessing CDF resources.
The CDF Board was also mindful of the global financial crisis and the increased challenge of raising donor funding in this environment. To be eligible for consideration of grant or loan funding, Member States must be fully paid up in accordance with the agreement.
In order to achieve its objective of addressing economic dislocation arising from the operation of the CSME, the CDF will provide technical and financial assistance to attract investment and new industries to the disadvantaged countries, regions and sectors.
The Fund will also provide resources to improve efficiency and competitiveness of industry and achieve structural diversification and infrastructural development.
The maximum loan size is set at US$4 million. Eligible entities for the receipt of CDF assistance will include the Member States, regional institutions, and private sector entities.
All CDF Member Countries are eligible to receive financial and technical assistance support from the resources of the CDF.
However, in recognition of the special status of the Lesser Developed Countries (LDCs), and Guyana, when the Fund was being established, the More Developed Countries (MDCs) agreed not to avail themselves of the resources during the first contribution cycle.
This means that during the first contribution cycle, only the disadvantaged countries, namely the LDC Member Countries, and Guyana (classified as a Highly Indebted Poor Country at the time when the Fund was being established) are eligible for receiving financing from the Fund.
However, the MDCs could benefit from regional studies, research, and joint ventures undertaken to address the needs of the disadvantaged countries, regions and sectors.

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