IDB deploys financial, technical support for borrowing countries affected by COVID-19

Apr 09, 2020 News

The Inter-American Development Bank (IDB), as well as IDB Invest, will be deploying financial and technical resources for borrowing member countries such as Guyana, and even for companies, to address the crisis created by the coronavirus (COVID-19).

IDB President, Luis Alberto Moreno (IDB photo)

Based on extensive dialogue with the governments of member countries and technical analysis by Bank specialists, the IDB Group said it will concentrate its support in four areas.
In the area of Immediate Public Health Response, the financial institution said that there will be support for countries’ preparedness and response capacities to help contain the transmission of the virus and mitigate its impact, with resources to strengthen public healthcare systems and purchase supplies and equipment.
With regard to Safety Nets for Vulnerable Populations, the IDB said that there will be measures to protect the income of the most affected populations through existing transfer programmes, non-contributory pensions and grants.
Other proposed measures include extraordinary transfers to workers in the informal sector and support for companies in sectors particularly affected by the crisis, such as tourism.
As for Economic Productivity and Employment, the Bank said that there would be assistance available for small and medium scale enterprises which account for 70% of the region’s jobs, through financing programmes and short-term liquidity guarantees, foreign-trade financing and guarantees, loan restructuring, and support for strategic supply chains.
The IDB has also put measures in place to address Fiscal Policies for the Amelioration of Economic Impacts.
Expounding on this area, the Bank said that there will be support for countries in designing and implementing policies in three key areas: fiscal measures to finance the response to the crisis; continuity plans for the execution of expenditures and public procurement; and measures to support economic recovery.
On the premise of the foregoing, IDB President, Luis Alberto Moreno said that the bank is immediately reprogramming resources to help with this health emergency. He noted however that the historic dimensions of the crisis require a multi-sectoral strategy that anticipates the social and economic impact over the medium and long term.
Moreno said that these lines of action reflect the priorities of governments and the deep knowledge that the bank’s specialists bring to bear on the specific challenges facing each of its member countries.
Since the end of January, the IDB Group has increased the availability of funds and adjusted lending instruments to streamline support for countries affected by the virus. The Bank has also established learning and exchange platforms to help make its technical knowledge available to the region and facilitate dialogue with international organizations and governments that are collaborating to combat the pandemic.
In addition to reprogramming its existing portfolio of health projects to address the crisis, the IDB has said that it can direct US$3.2 billion more to the lending programme initially stipulated for 2020. These funds, added to the available resources already programmed for this year, would make up to US$12 billion available to countries for the purpose of responding to the health crisis and its consequences.
Kaieteur News understands that Governments can also request the redirection of resources from projects in execution in other sectors to meet needs related to the virus. These resources could total up to US$1.35 billion.
As for IDB Invest, the private sector institution of the IDB Group, it will contribute up to US$5 billion to these efforts in 2020. Of that total, US$4.5 billion will come from its investment programme, focusing on companies impacted by the crisis.
Additionally, IDB Invest is working on a new US$500-million Crisis Mitigation Facility targeting investments that provide a direct response to the pandemic through health and health-related sectors and access to short-term lending for small and medium-sized enterprises through financial institutions and supply chain finance.
In addition to these efforts, the IDB Group is exploring options to streamline fiduciary processes and timeframes for approving operations in order to maximize and accelerate its support for the region at this critical time.
The IDB Group is the leading source of development finance for Latin America and the Caribbean. It helps to improve lives by providing financial solutions and development know-how to public and private sector clients. The Group comprises the IDB, which has worked with governments for 60 years; IDB Invest, which serves the private sector; and IDB Lab, which tests innovative ways to enable more inclusive growth.