 This is the second loan agreement in two months. / A.M. Costa Rica wire services photo. |
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 Published Monday, July 27, 2020 International
Bank approves
$300 million loan to Costa Rica By the A.M. Costa Rica staff A new $300 million loan for Costa Rica was approved by the Central American Bank for Economic Integration, CABEI, on Friday. The bank, headquartered in Tegucigalpa, Honduras, has regional offices in Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica and Panama. According to the bank, this new loan will be used to reduce the economic effects caused by the covid-19 crisis, help with the fiscal problem, finance carbon reduction projects and improve the economy. The loan is made up of two parts. The first part is $250 million, which is the maximum amount available for each country within the Development Policy Operations Program known as OPD. And the remainder of the loan, $50 million to attend to the emergency caused by the pandemic. "The primary goal of CABEI's Development Policy Operations Program (OPD) is to financially support its member countries in the implementation of actions that allow the reactivation and strengthening of their economies, seeking their macroeconomic stability," said Dante Mossi, president of CABEI. According to Elian Villegas, Minister of Finance, the economic reactivation must go hand-in-hand between the government and private companies, so this is a way to collaborate in that national effort, which is imperative at this time for the country. This is the second loan agreement in two months.  On May 4, the government presented to Congress a $550 million loan contract with CABEI to finance the construction of the infrastructure for the first electric train in the country. The loan is for a 25-year term, with no commitment fee, a 5-year grace period, and a counterpart for $1 billion of foreign investment as it is a concession project. The concession is a legal figure that allows the government to contract private companies to develop infrastructure, health, and education projects, among others. According to President Alvarado, "this (electric train) and the other infrastructure projects will be essential and irreplaceable for the recovery and employment that our country needs." The construction of the train infrastructure and maintenance project will generate about 2,670 jobs, said the government. The train has been budgeted at more than $1.5 billion. Part of this budget is the $550 million loan that is pending approval by the deputies. The loan, if approved, will be used to build the required infrastructure of the train terminal with an indicative annual interest rate of 4.95 percent. "Due to the positive impacts of this operation, the bank is making significant efforts with other sources of cooperation to maximize these conditions with the expectation of extending the term to up to 40 years and lowering the annual interest rate to 1.55 percent," CABEI said in its statement. Congress has not yet announced the decision on the electric train loan. ---------------------------------- Should the government continue to get more loans with international banks? We would like to know your thoughts on this story. Send your comments to news@amcostarica.com |
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