Dominica is among four OECS states which are expected to benefit from a US$20 million global loan program.
The Caribbean Development Bank (CDB) will be on-lending the loan funds which were approved on Wednesday by the CDB board, for the financing of public sector projects in Dominica, Grenada, St. Lucia and St. Vincent and the Grenadines.
“Since these small open economies are vulnerable to external economic shocks and natural disasters. They are also still reeling from the effects of the recent financial crisis,” according to an article in the online publication, Caribbean News Now.
It said the new approved program will help address the social and economic challenges of these countries which are not members of the Inter-American Development Bank (IDB) and which are constrained by their limited access to longer term and lower cost credit resources.
‘The loan will support areas such as education, infrastructure, mitigation and adaptation to climate change and also policy based operations (up to 25% of the resources can be used to finance PBLs). Resources will be allocated by CDB based on its country strategy and programming processes’. It said.
The Inter-American Development Bank (IDB) charter was amended in 1977 to allow the Bank to provide financial resources to the Caribbean Development Bank (CDB) to support its member countries.
Prior to the approval of the new loan, the IDB had financed four global loan programs to the CDB totaling US$104 million, as well as various technical cooperation operations.
The approved program will be financed by US$14 million from the IDB’s ordinary capital and US$6 million from the Bank’s Fund for Special Operations (concessional funds).
Loan funds from the bank’s ordinary are to repaid over 30 years while the concessional portion of the loan will require 40 years.
CDB has lowered its fees on the concessional portion of the loan, in order for the beneficiary countries to access these resources at more favorable rates.