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Published Monday,
May 18, 2020
Congress approves new
$370million-plus government loan By the A.M. Costa Rica staff The deputies of the Congress approved on Saturday, bill No.21871 of a $379 million loan agreement between the country with two international banks, the Inter-American Development Bank, IDB, and the French Development Agency, or AFD for its French initials. According to Congress, the loan with AFD was originally asked to finance Costa Rica's decarbonization plan, but will now be used to support the crisis due to the pandemic. The IDB, offered $230 million and about $149.5 million was offered by the AFD, announced the government. The loans offered on favorable terms will be used to finance the Protect Plan, according to the government. There is a repayment term of 20 years and a grace period of 5.5 years. The IDB interest rate is 3-month LIBOR plus 0.92%, and the AFD interest rate is 6-month Euribor plus a 1.3% margin. The Plan Proteger or Protect Plan, the so-called “Bono Proteger” which is a monetary aid for people affected at their place of employment by the suspension of commercial operations imposed by the government since March, is part of the precautionary measures to contain the expansion of covid-19. The new loans were offered because, between 2019 and the first quarter of 2020, the government executed 13 public policy reforms that are on the road to a "more efficient, clean and environment-friendly economy," the government said in its statement. This strategy of accessing loans in exchange for improvements in public policies is known as the Policy-Based-Program. In the case of Costa Rica, banks are acknowledging progress with the implementation of the Decarbonization Plan, the government said. According to the government, there is also the open door to negotiate a second loan in a few years, that is if the country continues with the Decarbonization Plan. ---------------- Should the government continue to get more loans through international banks? We would like to know your thoughts on this story. Send your comments to news@amcostarica.com Below are
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