MercoPress. South Atlantic News Agency

IMF and IDB to boost Paraguay's sustainable development initiatives

Goldfajn (R) and Georgieva (L) highlighted Paraguay's progress after meeting with President Peña

The Inter-American Development Bank (IDB) and the International Monetary Fund (IMF) announced this week in Asunción an increase in cooperation with Latin American and Caribbean countries regarding environmental initiatives and sustainable development.

IDB President Ilan Goldfajn and IMF Managing Director Kristalina Georgieva commented on this issue from the Government Palace in the Paraguayan capital after meeting with President Santiago Peña, with whom both credit agencies pledged to work together on climate change adaptation and mitigation reforms under the Resilience and Sustainability Facility (SRS) Agreement, for which Paraguay received US$100 million in financing.

In addition, the IMF representative described a joint initiative with Paraguayan authorities regarding the Policy Coordination Instrument (PCI), a support plan to be implemented through November 2024 to ensure macroeconomic stability and resilience while improving productivity, fostering growth, and enhancing social protection and inclusion.

Georgieva congratulated Paraguay for its “sound macroeconomic policies” which made the country an example when it comes to green economy. The IMF also committed US$ 400 million for a sustainability fund.

“Paraguay's commitment to sound macroeconomic policies is translating into solid growth, low inflation, and attractiveness to foreign investors as well as the domestic private sector,” Georgieva said, “making Paraguay the first country in Latin America to benefit from this trust fund.”

“The world aspires to a green economy and a green economy is what Paraguay has achieved,” she added.

Meanwhile, Goldfajn highlighted the country's renewable energy production potential and its capacity to export electricity, while praising its 25 years of macroeconomic stability that allows sustained growth. He also announced that Paraguay would be hosting the annual IDB and IDB Invest meetings in 2026. “We want to show the world how working together with the IMF will bring benefits to the region and the world,” he said.

Cooperation between both financing agencies and Paraguay will include the IDB Climate project, a pilot program aimed at the recovery of the Ypacaraí Lake basin.