The Inter-American Development Bank (IDB) approved a US$50 million loan to support member countries of the Organisation of Eastern Caribbean States (OECS) and their response to the health, social and economic consequences caused by the COVID-19 crisis.
This loan to the Caribbean Development Bank will provide economic resources to the OECS member States. The OECS is comprised of Antigua and Barbuda, Commonwealth of Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia and Saint Vincent and the Grenadines. Since 1977, the IDB has provided US$227 million to the CDB in a long-term collaborative relationship.
The program will help reduce mortality and morbidity from COVID-19 and ensure minimum levels of quality of life and health for vulnerable people in the mentioned countries. In addition, it will provide support for Micro, Small and Medium-Sized Enterprises (MSMEs). OECS countries have reported lower infection rates compared to other countries in Latin America and the Caribbean. However, OECS countries are still highly vulnerable to health, social and economic risks caused by the COVID-19 crisis. Before the crisis, OECS countries used to receive more than 1 million visitors annually. This number represents nearly 200% of their total population, making OECS countries highly vulnerable to any external factors that affect tourism and presenting serious economic and social impacts for the resident population.
In response to the COVID-19 crisis, the loan will strengthen response leadership at the country level, improve services delivery capacity, support initiatives to break the chain of transmission of the illness and improve case detection and management.
The program will finance cash transfers and the expansion of safety net services through the use of existing cash transfer programs and platforms in each OECS country. These include conditional cash transfers, transfers for people with disabilities, school-attendance grants for vulnerable populations, school meal support, noncontributory pensions and actions to mitigate the effects of school closures during the crisis and prepare for their reopening, among others.
In order to support the MSME financing the intervention will improve the short-term financial capacity and will provide access to production-oriented finance for economic recovery.
The program beneficiaries include OECS residents and visitors and MSMEs affected by the COVID-19 crisis. Health interventions will benefit OECS countries population through preventive actions that will be publicly announced soon.
It will also benefit people with potential diagnosis of COVID-19 and those who were diagnosed already and in need of specialized care. It may benefit up to 150,000 vulnerable individuals and 360,000 working age persons that have lose formal or informal sources of income or have closed their businesses due by COVID-19 crisis. It will give priority to the tourism, retail, service, logistics, agriculture, and fishery sectors for their high vulnerability to coronavirus and it is expected to benefit up to 19.000 MSMEs.
The IDB loan of US$50 million has a repayment term of 25 years, a grace period of five and a half years and an interest rate based on LIBOR.
The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social, and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.