World Bank Approves US$514 million of Financing to Support Economic Recovery in Ecuador
The World Bank’s Board of Executive Directors approved a US$500 million credit and US$14.1 of non-reimbursable resources from the Global Concessional Financing Mechanism (GCFF) to support Ecuador’s economic recovery.
The resources will help the Government support those families most affected by the COVID-19 pandemic, as well as strengthen policies to eliminate constraints to private sector development and promote economic recovery. The financing will also support enhanced public sector efficiency and public finance sustainability during the crisis.
“This support from the World Bank demonstrates the confidence that the international community has in Ecuador and is recognition of the government’s economic program,” said Minister of Economy and Finances Mauricio Pozo. “In the face of the pandemic crisis, the priorities of the federal government are protecting the most vulnerable groups and economic recovery. I thank the World Bank for approving this credit that will allow us to move forward with those objectives.”
The loan approved today is the third in a series of programmatic financial operations supporting inclusive and sustainable development policies. The first in these series of loans was disbursed in June 2019 and the second in May 2020. This third operation supports the reform agenda and the country’s finances at a very complicated time for Ecuador’s economy.
These resources supplement the previous operations that were aimed at designing mechanisms to expand social protection programs and strengthen monetary transfer systems for the most vulnerable families.
“From the onset of the pandemic, the World Bank has worked closely with the Government of Ecuador to provide the means to confront and mitigate the impact of COVID-19, particularly for the most vulnerable families,” said Marianne Fay, World Bank Director for Bolivia, Chile, Ecuador and Perú. “We have mobilized new resources and restructured projects underway to focus on the needs arising from the pandemic.”
This is a fixed-margin loan, with a maturity period of 11 years and a 4-year grace period.
Ecuador will also receive a non-reimbursable US$14.1 million grant from the Global Concessional Financing Mechanism (GCFF).
Additionally, Ecuador will benefit from a US$14.1 million budgetary support grant by GCFF, which was established to support middle-income countries that have admitted a large number of refugees. These resources are recognition and support for Ecuador’s efforts help the Venezuelan migrants and refugees, as well as the communities hosting them. Last May, the GCFF also provided US$6 million to the Government of Ecuador.
The GCFF was created in 2016 by the World Bank, the United Nations and the Islamic Development Bank as a global platform to provide concessional financing to mid-income countries hosting a large number of refugees. Supporters of the GCFF include Canada, Denmark, the European Commission, Germany, Japan, the Netherlands, Norway, Sweden, the United Kingdom and the United States of America.
World Bank Group Response to COVID-19 (coronavirus
The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response. It is supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector continue to operate and sustain jobs.
The World Bank Group is making available up to $160 billion over a 15-month period ending June 2021 to help more than 100 countries protect the poor and vulnerable, support businesses, and bolster economic recovery. This includes $50 billion of new IDA resources through grants and highly concessional loans and $12 billion for developing countries to finance the purchase and distribution of COVID-19 vaccines.