Jamaica and IDB Sign Largest Loan Agreement

Jamaica and the Inter-American Development Bank (IDB) have signed the largest loan commitment ever been made to Jamaica at any one time. The loans totalling US$329-million exceed the total loan disbursements made to Jamaica by the IDB for more than ten years.
The three loan agreements were signed this morning (Jan 19) at Jamaica House by Prime Minister Bruce Golding, Finance Minister Audley Shaw and the President of the IDB, Luis Moreno. Speaking at the signing, Prime Minister Golding said the agreements represent a re-engagement of Jamaica’s relationship with the IDB, because for almost five years there were no loan disbursements made to Jamaica.
“It is strategic at this time because although we were not able to foresee it at the time, even before the election we signalled to the IDB that if we became the Government, we would be pursuing certain policies and the multi-lateral lending institutions would be critical to those policies. We did not know at that time but it turned out to be extremely good that we did because since the global economic turmoil has escalated , the access to capital markets of the world to secure financing for development needs, has virtually shut down”, Mr. Golding said.
Of the three loans-the largest one- US $300-million represents a partnership between the IDB and Jamaica in support of private sector activities. He said these funds are to be disbursed through approved financial institutions. Mr. Golding said the loans were timely as they come at a time when lines of credit have been withdrawn or tightened and private and productive sectors were facing serious challenges in sourcing raw materials for the working capital they needed. He emphasised however, that the loans are for the productive sector.
“We have to support that segment of the economy that earns foreign exchange and to the extent that they have been badly exposed to the difficulties that have emerged”. He said the negotiations had been done in the last two months and that this is a historic move as all the details were finalised in that short time. Mr. Golding commended the IDB for the fast tracking that has been done.
The other two loans are for US $14million and US$15M. The US$14M is to complete the construction of a number of primary schools and US$15M is to be used to expand the PATH programme.
In his brief remarks, President Moreno said the facility was one of the largest provided to any Caribbean country. He emphasised that the loans were being made available for the sole purpose of providing Jamaican businesses with access to funds and liquidity, to help their businesses to prosper and grow despite the global economic crisis. This money will be available for on-lending to banks and other financial agencies through the Development Bank of Jamaica.
He said the IDB would be working with the Government to ensure that the money is made available to the private sector. Mr. Moreno expressed the bank’s commitment to working with the Government of Jamaica. He concluded that the IDB remains committed to Jamaica, especially at this time when countries will have to unite to face the crisis and the challenging year that lies ahead.
Also participating in the signing and the discussions this morning were Minister of State in the Ministry of Finance Don Wehby; Minister of Education, Andrew Holness; Minister of Industry Commerce and Investment, Karl Samuda and representatives from the Bank of Jamaica, the Jamaica Chamber of Commerce and the Small Business Association of Jamaica.