This is the second loan with CABEI during the pandemic that has been presented by the government to the Congress for its approval or rejection.
  - A.M. Costa Rica wire services illustrative photo -









































































































Published Tuesday, September 22, 2020


New $300 million loan announces
the government



By the A.M. Costa Rica staff


The government announced on Wednesday the signing of a new $300 million loan with the Central American Bank for Economic Integration - CABEI.

CABEI headquarters is in Tegucigalpa, Honduras and has regional offices in Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica and Panama.

According to the government, the loan will be used to create the National Endorsement and Guarantees Fund to provide credit to entrepreneurs affected by the pandemic.

The loan with the CABEI comes from two programs developed by the bank:

• $250 million is from the Development Policy Operations Program.

• An additional $50 million is allocated to the Regional Program for Support for covid-19 and Economic Reactivation.

The loan agreement will be presented to Congress, for the respective analysis, followed by a rejection or approval.

If Congress approves it, the government estimates that the fund could be used to offer loans to 18,000 entrepreneurs and will be available in 2021.

This is the second loan with CABEI during the pandemic that has been presented by the government to the Congress for its approval or rejection.

In May, the government presented 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-years grace, 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.

resident Carlos Alvarado said, "this (referring to the electric train) and the other infrastructure projects will be essential and irreplaceable for the recovery and employment that our country needs."

According to the government, the train infrastructure construction and maintenance project will generate about 2,670 jobs.

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. However, in a statement provided by the bank in November, "the project's investment in infrastructure and equipment represents $1.3 billion."

The loan, if approved, will be used to build the required infrastructure of the train terminal.


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Should the government allow entrepreneurs to reopen their business instead of offering loans?
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