BTN News: The Ministry of Economy and Finance of Peru has taken a significant step toward bolstering the nation’s fiscal and economic recovery by approving a contingent loan of $600 million from the Inter-American Development Bank (IDB). This strategic financial move, formalized through a supreme decree published in the official gazette, El Peruano, signals a proactive effort to ensure economic stability and resilience in the face of potential financial challenges. The loan agreement, designed to provide flexibility and security, can be utilized over a three-year period from the date the contract becomes effective, with the possibility of extending this period for an additional three years.
This contingent loan offers a structured repayment plan tailored to the specific needs of each disbursement request. The amortization schedule is capped at 20 years from the date of the respective loan contract’s signing. This timeline is subject to adjustment in line with the IDB’s policies, ensuring that the repayment terms remain feasible and manageable for Peru.
One of the notable features of this arrangement is the absence of inspection and surveillance fees during the disbursement period. This fee exemption will remain in place unless reinstated by the IDB, with a stipulation that any such fee cannot exceed 1% of the contingent loan amount in any given semester. This fee, if applied, will be calculated based on the number of semesters included in the original disbursement timeline.
The Ministry of Economy and Finance, through its General Directorate of Public Treasury, will serve as the executing unit for the “Program of Support to Peru’s Fiscal and Economic Recovery II” under this contingent loan modality. This designation underscores the ministry’s pivotal role in managing the loan and ensuring its optimal use to support the country’s economic recovery initiatives.
This financial strategy is pivotal for Peru as it navigates the complexities of post-pandemic economic recovery. By securing a substantial contingent loan from the IDB, Peru is better positioned to address potential fiscal gaps and ensure sustained economic growth. The flexibility of the loan terms, including the possibility of a six-year utilization period and a 20-year repayment schedule, provides the necessary fiscal space for the government to implement effective recovery measures.
In conclusion, the contingent loan of $600 million from the Inter-American Development Bank represents a crucial lifeline for Peru’s economic recovery efforts. The structured repayment terms and the absence of surveillance fees during the disbursement period make this loan an attractive and viable option for the country’s fiscal management strategy. As Peru continues to rebuild its economy, this strategic financial support will play a vital role in achieving long-term stability and growth.
