Minister of Finance Colm Imbert has signed the first tranche of a Policy-Based Loan Agreement in the sum of US$180 million with the Corporación Andina De Fomento (CAF) Development Bank.
The total loan of US$300 million will be used for the implementation of the programme to support Government’s “Medium-term Fiscal Consolidation Strategy – Phase II”, to boost potential growth and reduce the economy’s vulnerability to external fluctuations and volatility of external terms of trade.
The Ministry of Finance says this programme aims to increase fiscal revenues; improve public expenditure efficiency and accountability; strengthen public debt management and promote fiscal policy sustainability.
It says policy actions which will be supported under the loan agreement include: •
Tax policy reform for the energy sector
• Corporation tax reform
• Implementation of an environmental tax
• Improve public procurement mechanisms
• Strengthening of the Central Audit Committee of the Ministry of Finance
• Review of the Public Debt Legislation
• Improvement of the Bond Market
• Establishment and operationalization of the National Investment Fund
• Monitoring fiscal consolidation progress
The ministry says the loan is being pursued under the International Financial Organizations (Corporación Andina De Fomento) Act No. 5 of 2017.‘CAF is a development bank created in 1970, owned by 19 countries – 17 of which are Latin American and Caribbean countries, Spain and Portugal- in addition to 13 private banks in the region.
CAF promotes a sustainable development model through credit operations, nonreimbursable resources, and support in the technical and financial structuring of projects in the public and private sectors of Latin America’.