Thursday, 19 February 2009

IADB Extends $600 Million Contingent Credit Facility to Latin, Caribbean Countries to Cope with Natural Disasters

The Inter-American Development Bank pledged $600 million in contingent credit facilities to help Latin America and Caribbean countries cope with hurricanes, floods and the same natural disasters that every year afflict millions of people. The IADB said the drawdown of funds would be contingent upon the occurrence of a natural disaster of a type and intensity determined by the facility guidelines, with borrowing terms similar to those regularly applied to the bank's credit operations. Facility loans will be up to $100 million or the equivalent of 1 percent of the nation's gross domestic product, ''whichever is less.´´

Something very positive must be highlighted here. The IADB is requiring countries to have an adequate integrated disaster risk-management programme. This is excellent news -- because countries like Haiti or Cuba or Jamaica will have to train their own people and invest in risk analysis technology, crisis prevention, mitigation, emergency preparedness and disaster response. Under the new conditions, ''provisions for adequate and sustainable financing of the remaining risks´´ will be required, said the IADB, ''executable in a period of no more than five years.´´

I guess this also comes as good news for the region in general amid funding shortages. Many countries facing a delicate financial position and potential balance of payments crisis -- such as the Dominican Republic and Jamaica, -- must be sighing with relief.

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