New World Bank programme targets SMEs, infrastructure
THE International Finance Corporation (IFC) plans to lend US$120 million ($13.2 billion) to small businesses by 2018 under the latest country partnership strategy (CPS) with the World Bank.
The private lending arm of the World Bank also has its sights set on Highway 2000, which is expected to see the number of motorists using the toll roads double to two million a year by the end of 2016, when the new legs running from Kingston to St Ann are scheduled for completion.
Having already been given authorisation to leverage up to US$500 million in the local capital markets, the IFC expects to issue three local currency bonds to finance new investments in logistics, agribusiness and information and communications technology (ICT) by the end of 2017.
What's more, about half of the resources to implement the CPS will be provided through investment project financing in line with the goals of ending extreme poverty and promoting shared prosperity, according to a World Bank statement issued yesterday.
Indeed, the World Bank also sees itself supporting the build out of the 360 megawatt (MW) electricity generation slated for the next three years — the multilateral plans to carve a new energy loan out of the US$510 million it has committed for support to Jamaica up to 2017.
On the other hand, the latest World Bank programme has a strong focus on SMEs and enabling business on a whole.
For example, through new and existing loans, 1,500 micro, small and medium enterprise (MSME) agricultural producers are to be trained on food safety compliance with focus on exports by the end of 2016, while two mobile and climate innovation incubators are to be established by the end of next year.
The CPS also aims to reduce the time to acquire a construction permit from 135 days to 90 and halve the time it takes to register a company from six days to three by the end of next year.
Another goal is to cut tax payments from 36 per year, based on calculations in the 2014 Doing Business Report, to 24.
Yesterday, the World Bank Group's executive endorsed the new CPS, which they said was focused on creating the conditions for growth and prosperity for all Jamaicans.
"For the past two decades, Jamaica has been trapped in a cycle of low growth, high debt, and limited fiscal space", said Sophie Sirtaine, World Bank Country Director for the Caribbean. "The reforms adopted by the government have started restoring confidence in the Jamaican economy. This new strategy is about changing the growth trajectory of Jamaica and boosting competitiveness and private sector development. It also comes with support in scaling up successful programmes in social protection, early childhood development and community development."
The CPS defines the action plan jointly prepared by the Government of Jamaica and the World Bank Group, comprised by the World Bank, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA).
"Jamaica is at a turning point when it can truly leverage the power of the private sector to create new jobs and growth opportunities, strengthen the country's infrastructure and logistics, and promote competitiveness," said Jun Zhang, IFC Senior Manager for the Caribbean. "IFC looks forward to deepening its engagement particularly in key sectors such as energy, transport, access to finance, agribusiness, and education."
MIGA will continue to facilitate foreign direct investment and private sector development by offering its traditional political risk insurance products on infrastructure, energy, agribusiness and other growth-related sectors.