IDB Group announces priority support areas for countries affected by COVID-19
IDB Invest to contribute up to $5 billion in financing for companies affected by the coronavirus pandemic
The Inter-American Development Bank and IDB Invest have outlined their focus for deploying the financial and technical resources made available to borrowing member countries and companies to address the crisis created by COVID-19, the disease caused by the coronavirus.
Based on extensive dialogue with the governments of member countries and technical analysis by Bank specialists, the IDB Group will concentrate its support in four areas:
- The Immediate Public Health Response: Support for countries’ preparedness and response capacities to help contain the transmission of the virus and mitigate its impact, with resources to strengthen public healthcare systems and purchase supplies and equipment.
- Safety Nets for Vulnerable Populations: Measures to protect the income of the most affected populations through existing transfer programs, non-contributory pensions and grants. Other proposed measures include extraordinary transfers to workers in the informal sector and support for companies in sectors particularly affected by the crisis, such as tourism.
- Economic Productivity and Employment: Assistance to SMEs, which account for 70% of the region’s jobs, through financing programs and short-term liquidity guarantees, foreign-trade financing and guarantees, loan restructuring, and support for strategic supply chains.
- Fiscal Policies for the Amelioration of Economic Impacts: Support to countries in designing and implementing policies in three key areas: fiscal measures to finance the response to the crisis; continuity plans for the execution of expenditures and public procurement; and measures to support economic recovery.
“We are immediately reprogramming resources to help with this health emergency,” said IDB President Luis Alberto Moreno. “However, the historic dimensions of the crisis require a multisectoral strategy that anticipates the social and economic impact over the medium and long term. These lines of action reflect the priorities of our governments and the deep knowledge that our specialists bring to bear on the specific challenges facing each of our countries.”
Since the end of January, the IDB Group has increased the availability of funds and adjusted lending instruments to streamline support for countries affected by the virus. The Bank has also established learning and exchange platforms to help make its technical knowledge available to the region and facilitate dialogue with international organizations and governments that are collaborating to combat the pandemic.
In addition to reprogramming its existing portfolio of health projects to address the crisis, the IDB can direct $3.2 billion more to the lending program initially stipulated for 2020. These funds, added to the available resources already programmed for this year, would make up to $12 billion available to countries for the purpose of responding to the health crisis and its consequences.
Governments can also request the redirection of resources from projects in execution in other sectors to meet needs related to the virus. These resources could total up to $1.35 billion.
IDB Invest, the private sector institution of the IDB Group, will contribute up to $5 billion to these efforts in 2020. Of that total, $4.5 billion will come from its investment program, focusing on companies impacted by the crisis. Additionally, IDB Invest is working on a new $500-million Crisis Mitigation Facility targeting investments that provide a direct response to the pandemic through health and health-related sectors and access to short-term lending for small and medium-sized enterprises through financial institutions and supply chain finance.
In addition to these efforts, the IDB Group is exploring options to streamline fiduciary processes and timeframes for approving operations in order to maximize and accelerate its support for the region at this critical time.
About the IDB Group
The IDB Group is the leading source of development finance for Latin America and the Caribbean. It helps to improve lives by providing financial solutions and development know-how to public- and private-sector clients. The Group comprises the IDB, which has worked with governments for 60 years; IDB Invest, which serves the private sector; and IDB Lab, which tests innovative ways to enable more inclusive growth.