Published Thursday, April 2, 2020
Development Bank of Latin America offers more loans to the government



By the A.M. Costa Rica staff

The Venezuela-based Development Bank of Latin America, CAF, offered the government a new loan of $50 million to face the economic crisis caused by the coronavirus covid-19.

The bank is focused on loans for the development of Latin American countries. Founded in 1970 and currently with 18-member countries from Latin America, the Caribbean and Europe.

The bank has activated its "financial and technical cooperation tools to help countries (...) face this global pandemic," said Luis Carranza Ugarte, CAF president.

According to Carranza, these new credits were issued in response to a letter sent by President Carlos Alvarado on March 26, requesting historical measures by the UN and financial organizations to deal with the crisis.

The bank announced on Wednesday that it has renewed a line of credit so that each country can access the $50 million loan.

In March, the bank reported an approved loan of an additional $5 million to the non-reimbursable Technical Cooperation Fund to support countries that require it.

"Both loans are available to your country and have been brought to the attention of the Ministry of Finance and the Central Bank of Costa Rica," said Carranza in response to President Alvarado.

In addition to these two loans, the CAF bank created a third line of credit called the Emergency Credit Line of $ 2.5 billion, to support the fiscal measures that the governments of Latin American countries.

"Costa Rica will be able to benefit from this line as soon as the incorporation agreement is signed as a full member of CAF," said the Bank of Latin America in its statement.

According to the CAF statement, after acknowledging the bank response to his letter, president Alvarado said that this aid is key to relieving the negative effects of the crisis.

"I appreciate that international financial organizations take historic steps that help mitigate and protect the most vulnerable, in the face of the devastating damage to health and economies that the covid-19 pandemic will cause," Alvarado said.


In March, the deputies of the Legislative Assembly approved in the first round of voting, for requesting a loan of $500 million from the Venezuela-based Development Bank of Latin America, even though the agreement for this loan was signed in May 2019. It has a term of 18 years, including a three-year grace period and a 15-year amortization period.

One of the goals for the loan is to improve the government's finances, as well as being financially prepared to cover expenses that may arise from the emergency caused by covid-19 in the country, the government said in its statement.

Finance Minister Rodrigo Chaves once again thanked the speed with which Congress approved the project in the first debate. "Today, more than ever, the country requires resources to recover the balance of public finances," he said.

---------------------------
Are authorities from your country asking for loans to handle the covid-19 crisis?  We would like to know your thoughts on this story. Send your comments to news@amcostarica.com
..
hotelrestaurant103017.jpg