As the government finalizes details with the IMF to “ease” the agreed reserve target amid lower foreign exchange receipts and a drip in the central bank, The World Bank approved this Monday two loans for Argentinafor a total amount of US$ 450 million.
As confirmed by sources in the Ministry of Economy, the institution has given the go-ahead two new loans for Argentina: one of US$ 300 million aimed at reducing drop-out rates in both secondary and tertiary education, e another of US$150 million support planned urban growth that allows for more inclusive access to housing.
After the announcement, Sergio Massa said: “It is a great satisfaction to have the support of the World Bank to help finance educational inclusion, as well as to launch an urban land and habitat program to improve living conditions and access to infrastructure and services for more Argentine men and women”.
The disbursement comes at a critical moment. It was announced this weekend that an agreement had been reached with the IMF to make net reserve targets more flexible, meaning the central bank had to count $7.7 billion by the end of March, when it is lower of at least $3.5 billion. Between Monday and Tuesday the institution will formalize this change, which gives oxygen to the government in the short term and avoids the political blow of asking for an “exemption” for failure to achieve the objectives.
The turn of the multilateral organizations has been on Massa’s agenda since his arrival at the Palacio de Hacienda. The funds, in addition to increasing the Central Bank’s coffers, will be destined for two programs agreed with the World Bank.
On one side, $300 Million to Improve Inclusion in Secondary and Higher Education for Outcomes Project which supports the Progresar National Scholarship Program. This program currently reaches 1.4 million vulnerable young people to accompany and encourage them to finish their studies. “It is a fixed margin loan, repayable in 31.5 years and with an 8-year grace period,” they explained.
At the same time, another $150 million will go to the Habitat and Urban Land projectwhich will be implemented in 40 municipalities in the country “to improve living conditions in 17,000 homes through urban growth planning and the provision of better infrastructure and services in villas, informal settlements and degraded areas”.
It is a variable spread loan, repayable in 32 years and with a grace period of 7 years. Among other things, it will connect to basic services such as drinking water, sewage, gas and electricity in vulnerable neighbourhoods.
During his trip to India, Sergio Massa had met Axel van Trotsenburg, director general of operations of the World Bank. The representative of the organization had advanced “the Bank is preparing projects to benefit the most vulnerable for 1,000 million dollars in the first six months of 2023”. Last year it had already approved new loans worth $1.34 billion in 2022.
In addition to this disbursement, Argentina obtained a “saving” of US$ 400 million in interest on loans already granted and those planned for this year.
NS
Source: Clarin
