MercoPress. South Atlantic News Agency

IDB keeps approving loans for Argentina amid frozen disbursements

During her time in Washington DC this week, Argentine Economy Minister Silvina Batakis had no contact with any IDB official

The Inter-American Development Bank (IDB) has approved a credit line worth US$ 1140 million for energy investments and vowed to keep reviewing CEO Mauricio Claver-Carone's decision to halt a separate disbursement of over US$ 800 million to a country with such a credit record.

The new line promotes the decarbonization of the energy sector. “The IDB Group remains committed to supporting Argentina's development agenda with projects that have a direct impact on development,” the IDB said in a statement.

Claver-Carone, appointed by former US President Donald Trump, is blocking the disbursement of one loan worth US$ 500 million and the other worth US$ 300 million, on which the Argentine Government was already banking as external financing to meet some International Monetary Fund (IMF) guidelines for this year.

The IBD Chief wrote in the WSJ that he cannot give the “go-ahead” to new funds for Argentina, since, in his view, he would have to preserve the Bank's credit portfolio in view of the risk of lending to a country with this history and in this context.

Following the announcement of the new line, the IDB also issued a statement saying that “since October 1, 2020, with the arrival of Mauricio Claver-Carone as president of the IDB” u$s 2,557 million were disbursed in investment operations (for sectors) in Argentina.

“Both 2020 and 2021 were record years for IDB disbursements to the country,” the IDB also noted, while admitting its Board was planning to consider approving three more operations worth US$ 225 million next week.

The bank added that it “continues to review the case of the US$ 500 million of fast-disbursing specific financial instruments that provide the country with freely available funds” for development programs, in addition to u$s 300 million tied to climate change actions. “These funds and financing lines are not tied to investment or sectoral projects and need to prudently ensure that they have a measurable development impact. Our ultimate goal as Argentina's strategic partner is to achieve a sustainable and inclusive economic reactivation,” the IDB said while taking a distance from its own CEO, whose departure is sought by most countries in the region.

Regarding the new line for energy purposes, the IDB also announced that a first operation of US$ 200 million from the IDB was approved, € 100 million from the French Development Agency (AFD), and another € 100 million from the European Investment Bank (EIB). The euro and the US dollar are tied at a parity exchange rate whereby US$ 1 roughly equals € 1.

“This first operation aims to contribute to the decarbonization of the electricity sector by reducing its greenhouse gas emissions and to human development, through the expansion and modernization of electricity transmission systems,” the IDB explained in a statement.

During her time in Washington DC this week, Argentine Economy Minister Silvina Batakis had no contact with any IDB official.

(Source: El Cronista)