Costa Rica receives $ 300 million from World Bank to support recovery from pandemic



WASHINGTON, June 29, 2021. The Board of Directors of the World Bank today approved a loan of US $ 300 million in support of the Costa Rican government’s efforts to protect people’s incomes and jobs from impact of COVID-19, strengthen small and medium-sized enterprises (SMEs), strengthen fiscal sustainability and lay the foundations for a strong post-pandemic recovery based on green and low-carbon development.

“This operation is part of a solid and lasting relationship with the World Bank,” said Elian Villegas, Costa Rica’s Minister of Finance. “It supports our efforts to respond to the different waves of the pandemic, while continuing to create the conditions for a strong and sustainable recovery through economic, fiscal and climate reforms. “

The second “Budget Management and Decarbonization Development Policy Loan” builds on the first loan approved on June 24, 2020. The series is based on three mutually reinforcing pillars:

Support the response to the COVID-19 crisis, focusing on the livelihoods of vulnerable segments of the population through cash transfers, and with measures to help preserve jobs and SMEs.

· Help increase structural tax revenues and contain expenditure growth, while ensuring the sustainability of public finances in the aftermath of the pandemic.

· Promote green growth and low-carbon development for a competitive, climate-smart and sustainable post-pandemic recovery; including through measures to accelerate the deployment of clean technologies.

Costa Rica has a strong health system and the authorities reacted quickly to the health emergency; Nonetheless, the country has suffered significant social, economic and fiscal impacts since 2020 and is currently facing a third and severe wave of COVID-19.

“We stand together to protect the poor and the most vulnerable and those who have lost their jobs or suffered reduced incomes, including women and young people,” said Michel Kerf, World Bank country director for the Central America and the Dominican Republic. “We commend the authorities for taking important steps to improve the effectiveness of the safety net and vocational training programs, the insolvency framework, human resources and debt management, and transparency of the financial sector. energy. Many of these measures also help build back better by incorporating strong climate change targets. “

The US $ 300 million operation, funded by the International Bank for Reconstruction and Development, is a variable rate, single currency US dollar loan, and has a final maturity of 20 years, including a period of 4 year grace.

World Bank Group Response to COVID-19

Since the start of the COVID-19 pandemic, the World Bank Group has committed more than $ 125 billion to address the health, economic and social impacts of the pandemic, the fastest and most rapid response to the crisis. important in its history. The funding is helping more than 100 countries strengthen their pandemic preparedness, protect the poor and jobs, and launch a climate-friendly recovery. The Bank is also providing $ 12 billion to help low- and middle-income countries purchase and distribute COVID-19 vaccines, tests and treatment.

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