New World Bank Group Program to Support the Dominican Republic’s Economic Transformation

WASHINGTON —The World Bank Group’s (WBG) Board of Executive Directors endorsed the 2022-2026 Country Partnership Framework (CPF) for the Dominican Republic, which will support the country’s reforms for inclusive and sustainable development by improving access to quality public services, increasing high-quality jobs, and enhancing resiliency to climate change.

The new CPF guides the WBG’s support to the Dominican Republic. It proposes a work program of approximately US$1.8 billion over a five-year period to support the Government’s commitment to implement key reforms for economic transformation, especially in the aftermath of the COVID-19 pandemic, and in close alignment with the Dominican Republic’s long-term strategic objectives and development goals. Planned lending operations will support ongoing reforms in electricity, water, housing, health, and social protection, complemented by analytical work and technical assistance timed to help with the design or implementation of reform efforts.

“With the new CPF the WBG is stepping up its support for the Dominican Republic’s transformative efforts to provide quality basic public services, create additional better-paying jobs and strengthen its resilience to climate change,” said Michel Kerf, World Bank Director for Central America and the Dominican Republic. “We are committed to support the country’s efforts towards a more inclusive, dynamic, and resilient growth.”

The CPF for the Dominican Republic is designed around three mutually reinforcing focus areas:

1. Improved access to quality public service delivery, by supporting reforms to improve fiscal space and public spending, supporting the electricity sector reform program for enhanced efficiency and increasing coverage and quality of health and safety nets.

2. Increased number of high-quality jobs, by enhancing education quality and training, improving investment climate, and increasing mobilization of finance for women, low-income households, and infrastructure.

3. Increased resilience to climate change, by enhancing the sustainability of landscape and natural resources, including “blue economy” assets, improving water resource management and further strengthening institutional and financial capacity to manage the country’s exposure to natural shocks.

“The new CPF is anchored on our ongoing work program in the country and is focused on helping the current reforms to position the Dominican Republic on an ascending economic growth trajectory, while leaving no one behind,” said Alexandria Valerio, World Bank Representative in the Dominican Republic.

The WBG will also work to identify opportunities for private sector solutions in the Dominican Republic. The International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) will help foster an enabling environment for the development of public-private projects (PPP) and seek investments in export-oriented companies and infrastructure to improve private sector competitiveness and sustainability. IFC will focus in creating new markets in areas with high growth potential and development impact, such as sustainable agriculture, renewable energy, and access to finance, and MIGA will seek opportunities to support foreign direct investments.

US$400 Million Loan to Support Electricity Reform and Sustainable Growth

The World Bank Board of Directors also approved a US$400 million loan to support the Government of the Dominican Republic’s electricity reform program which aims to address the country’s decades-long challenge of unreliable, high-cost, and carbon-intensive electricity services.

The Electricity Reform for Sustainable Growth Development Policy Loan (DPL) is the first of two operations that will support fundamental policy and institutional reforms aimed at strengthening electricity sector governance, enhancing social and environmental sustainability, and improving the financial self-sufficiency and operational performance of the sector. These reforms are also expected to put CO2 intensity in a declining path. Specifically, the DPL supports the implementation of the country’s climate strategy and is expected to result in 500 MW of power generation from renewable energy sources to be contracted.

This operation is fully aligned with the new 22-26 CPF and it contributes to the country’s ongoing reforms in the energy sector which include the reduction of electricity distribution losses, a roll-out of an electricity tariff reform program while protecting poor households, the transition to a greener lower carbon energy mix and provide economic affordable electricity prices for all Dominicans.

This a flexible loan with a repayment schedule for 19 years, including a 5-year grace period.

 

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