CABEI and the Government of Costa Rica sign a US$300 million credit agreement that will be the basis of the National Guarantee Fund
Participating in the signing ceremony of the financing contract were the Country Chief of Staff, Mauricio Chacón, Minister of Finance, Elian Villegas, and the Minister of National Planning and Economic Policy, María del Pilar Garrido.
San José, September 16, 2020. – The Central American Bank for Economic Integration (CABEI) and the Government of Costa Rica, this Wednesday, signed the contract for the US$300 million credit that will serve as the basis for the creation of the National Guarantee and Deposit Fund for the economic reactivation and support of debtors affected by the COVID-19 pandemic.
This funding will be presented to Congress and, after approval, will be available to businesses and individuals with productive activities affected by the pandemic through financial institutions supervised by the Financial Institutions General Superintendence (SUGEF).
CABEI's loan comes from the Development Policy Operations Program (OPD) approved in July for US$250 million for Costa Rica, plus an additional US$50 million from the Regional Support and Preparation Program for COVID-19 and Economic Reactivation.
The administration of the Fund will be carried out through the creation of a trust, where the Ministry of Finance will be the grantor and the National Insurance Institute (INS) will be the trustee, which will allow the financial institutions to manage the operations under special conditions of interest rates and terms.
"This operation is the first of its kind that Costa Rica, as a founding partner of CABEI, receives from the entity and comes as a support at a time when the economy is living the ravages of the pandemic. It was hard work by the authorities and the Bank to be able to formulate and present the proposed law in this short term and we hope that in the coming weeks it will be available to the beneficiaries," detailed CABEI's Executive President, Dr. Dante Mossi.
The Minister of Finance, Elian Villegas, took part in the contract signing ceremony and said: It is time for the Costa Rican State to support the private sector in the reactivation process. The Guarantee Fund project aims to help this sector so that credit is more within reach, and so it can continue with its businesses, and employment generation that the country needs so much. This credit, signed with the Central American Bank for Economic Integration, is the instrument that will allow us to fund this guarantee fund in favor of private companies, in order to maintain jobs and carry out the reactivation process for Costa Rica' s benefit.
On her part, the Minister of National Planning and Economic Policy, María del Pilar Garrido, also participated in the signing as a honorary witness and explained that: "The Guarantee Fund is one of the economic roadmap's key instruments, whose purpose is to reactivate credit, protect jobs and support businesses affected by the pandemic, particularly in the tourism, trade and transportation sectors. The idea is that the guarantees will help improve businesses' access to bank credit for working capital and facilitate the readjustment of the debts of companies affected by COVID-19. This CABEI credit will have a major impact on economic recovery."
The Government estimates that the new National Guarantee and Bond Fund for economic recovery and support to debtors affected by the COVID-19 pandemic will benefit nearly 18,000 businesses and will be available to beneficiaries within 12 months.