IDB launches US$8-b facility for Caribbean, Latin America
Credit lines to help with external shocks, natural disasters
The Inter-American Development Bank (IDB) has launched two new credit facilities for Latin America and the Caribbean.
They were created to help countries deal with shocks caused by external financial crises and the aftermath of natural disasters.
"Many of the poorest citizens of Latin America and the Caribbean region have seen their lives improve in recent years thanks to better social programs and macroeconomic management," said IDB President Luis Alberto Moreno.
The new line, valued at US$8 billion ($717 billion), is designed to help countries protect their poorest citizens from sharp fluctuations in commodity prices. It will also aid in global liquidity crises and other external events.
A new Development Sustainability Contingent Credit Line (DSL) will make US$6 billion available to the IDB's 26 borrowing member countries over the 2012-14 period, with a maximum of US$2 billion per year.
The new DSL was approved by the IDB Board of Governors and replaces a previous US$3 billion Emergency Lending facility.
A separate Contingent Credit Line for Natural Disasters (CCL) will help countries cover urgent financing needs that arise immediately after a natural disaster.
Natural hazards and disasters can have significant impacts on the economic and social development of Latin America and the Caribbean, said the IDB.
Other work of the Bank include, helping countries design and implement risk management plans.
The overall amount for the CCL is capped at US$2 billion for 2012-14. In addition, a separate and currently available Contingent Credit Facility for Natural Disasters (CCF) is being expanded.
Development banks such as the IDB can help protect these policies and social programs from earthquakes, floods, commodity price fluctuations, external financial crises and other events that are beyond the control of governments, Moreno said.
The CCL for natural disasters is to provide borrowing member countries with resources to cover urgent financing needs that arise immediately after a natural disaster, until other sources of funding can be accessed.