October 24, 2014
US backs IDB loan for Argentina
Argentina will receive a loan worth US$400 million, or 1.7 billion pesos, from the Inter-American Development Bank to carry out infrastructure improvements in poor neighbourhoods, the government said yesterday. The decision follows an about-turn made by the US to approve credits to President Cristina Fernández de Kirchner’s government after several refusals to do so.
According to the Planning Ministry, which announced the new loan, the programme will help the urban and social inclusion of households living in precarious conditions. “Up to 70,000 families will benefit from infrastructure improvements including the provision of drinking water, sewers, gas, lighting for streets and homes and public spaces,” it said in a statement. That means that around 280,000 people who live in shantytowns or irregular housing will be affected for the better by the investment which will finance phase three of the so-called Neighbourhood Improvement Programme (PROMEBA).
The funds are part of a line of credit which were earmarked for investment projects by the bank in 2007 and will begin to be repaid in 2016 over a 25-year period and have a five-year grace period. The loan’s interest rate is based on Libor.
The loan is complemented by an additional US$45 million which will be funded by the Argentine government, the IDB said.
The US$400 million credit approval reflects a change in the US’s stance, given that even up until recently, Barack Obama’s administration had voted against lending Argentina money because of its government’s “failure to comply” with its international debt.
In September, State Department spokesperson Victoria Nuland said: “As a government we have encouraged Argentina to settle its pending issues” in the international disputes centre from the World Bank (ICSID, International Centre for Settlement of Investment Disputes) so as “to take the necessary measures to normalize totally and definitively its relations with creditors.”
This is the second operation led by the Conditional Credit Line Investment Project (CCLIP), which forms part of the PROMEBA organization which was approved in January 2007.
Entre Ríos. Also yesterday the IDB approved financing for a gas pipeline which will benefit the areas of Paraná and Diamante in Entre Ríos province.
The construction has been budgeted to cost around 20 million pesos and IBD is set to finance 80 percent of that, with the remaining 20 percent to be funded by the province’s energy secretariat.
Once completed, various industries and towns will benefit from the 33-km pipeline which will take 12 months to construct and carry natural gas around the province.