Jamaica Signs Loan Agreements with IDB

Prime Minister, Bruce Golding, and President of the Inter-American Development Bank (IDB), Luis Alberto Moreno, today (Jan. 19) signed three loan agreements totalling US$329 million during a ceremony at Jamaica House.
The Prime Minister told journalists, technocrats, and officials, that the loans will provide financial support for the private, and education sectors, as well as the Programme of Advancement through Health and Education (PATH).
“The largest agreement, for US$300 million (which will provide) liquidity support for the private sector, represents a partnership between Jamaica and the IDB in support of private sector activities. These funds are to be disbursed through commercial institutions. The two smaller loans, smaller in size but no less important, have to do with US$14 million, which is being made available to complete the construction of a number of primary schools, and US$15 million, which is to be used to expand the PATH programme. The PATH programme is significantly funded by the World Bank. What the IDB has done is to provide additional support that will enable us to expand that programme,” he outlined.
Noting the significance of the loans, Mr. Golding said they represent the largest single commitment, which Jamaica has received from the IDB, pointing out that, together, they exceed total disbursements, which the institution has made to the country in more than 10 years. Additionally, he said the agreements signified a re-engagement of Jamaica’s relationship with the IDB, which for five years had not disbursed any loans to the country “for a variety of reasons.” Further, that the loans were negotiated and approved in record time, within the last two months.
Mr. Golding emphasised the timeliness with which the loans were negotiated, noting that capital markets to which the country had access, have virtually shut down in the face of the current global recession. “Were it not for the support which we received from the multilaterals, and principal among those has been the IDB, I shudder to think what Jamaica’s alternatives would have been,” he underscored.
Mr. Golding pointed out that the global financial crisis has placed pressure on the local foreign exchange market, significantly affecting some of the country’s industries, which are primary earners, such as the bauxite/alumina sector. He said given the country’s level of indebtedness, and the maturities that have to be prepared, particularly a €200 million bond, which becomes due for payment within three weeks, there has been scepticism as to whether the needs for foreign exchange could be satisfied
“We are well positioned to meet our obligations, and we are well positioned to ensure that there are adequate supplies of foreign exchange in the market. We will be drawing that cheque and we will be paying out that €200 million that become due on the ninth of February,” he assured.
The Prime Minister was quick to point out, however, that while the Government is doing everything it can to address the situation, stakeholders need to take a “responsible approach.we have to work together, because this is a situation where Jamaica’s interests are at risk, and we don’t need to make our situation any worse than the global turmoil has created and caused”.
Meanwhile, Mr. Moreno noted that the loan agreements, which were the largest signed by the IDB with any country in the region, were to ensure access to funds by Jamaican businesses for sustainability. He pledged the IDB’s commitment to Jamaica, and stressed the need for stakeholders to unite in countering the prevailing challenges and others which may arise in the future.