FONPLATA support to member countries as a response to the COVID-19
In the face of a global synchronous crisis due to the COVID-19 pandemic, countries around the world continue to work to contain the spread and growing impact of the virus.
The deterioration of economic projections and its unparalleled impact underscore both the necessity of implementing a series of measures to promote economic recovery in the short and medium terms and the need of the support of the international community to achieve that.
Within this framework, FONPLATA, as a Development Bank that operates in the region, took quick and decisive action to provide flexible responses to the member countries, making available a special non-reimbursable cooperation fund, special funding lines through fast-track procedures for approval and disbursement, as well as the possibility of restructuring existing loans and of activating the emergency clause.
These tools have enabled the Operations and Countries Management of FONPLATA to quickly launch emergency health support operations to help save lives, detect, and prevent the virus, and respond to the pandemic, joining the efforts of the member countries.
As of September, the total funding amount for the entire portfolio of COVID-19 loan operations amounts to USD 121 millioni, which represents about 51% of the total loan operations and technical cooperation approvedii by the Executive Board of the Bank in 2020.
It is important to highlight that those operations and projects are mostly focusediii on:
The Special Report on the COVID-19 recently published by the ECLACiv projects that, in 2020, the world GDP will fall by 5.2%. This drop is estimated at 7.0% in developed economies and at 1.6% in emerging economies. In Latin America and the Caribbean, current epicenter of the pandemic, GDP is forecast to contract by 9.1% on average, in 2020; and by 9.4% specifically in South America.
Without any doubt, development banks will have to work harder than ever before with their member countries and financial partners to develop new technical cooperation and funding tools to be able to provide the additional resources needed to overcome this systemic crisis and to assure economic recovery in the short term, in accordance with the Sustainable Development Goals (SDGs). Therefore, on September 15, the Executive Board of Directors of FONPLATA approved a support line of up to one billion dollars in special financial conditions to alleviate the negative effects of the COVID-19, in addition to other actions taken by the Bank to support its member countries to face the challenges of the pandemic.
To learn more about the current projects in each member country, click here.
i This amount includes special funding lines approved to face the COVID-19, the special non-reimbursable cooperation fund operations, and the existing loan operations that have been restructured or redirected or that have activated the emergency contractual clause.
ii The amount totals USD 237.6 million on September 17, 2020.
iii Percentages are approximate and were estimated based on the main activities that were declared eligible within the framework of loan operations or technical cooperation in force.
iv In accordance with the Special Economic Report on the COVID-19, No. 5, issued by the ECLAC on August 15, 2020, available at www.cepal.org/publicaciones.