The International Bank for Reconstruction and Development (IBRD), original institution of the World Bank to assist developing countries, approved this Monday two projects for 400 million dollars to improve the quality of life and housing for more than 110,000 Argentinians. On Tuesday, it subscribed a guarantee for 480 million dollars to promote investment in renewable energy.

On this matter, the Minister of Finance, Luis Caputo, said: “This guarantee is an example of the actual benefits for the Argentine people to achieve investment and financing for productive projects and for the development of infrastructure; in this case it is for a strategic area such as renewable energy”.
In the first place, the International Organization approved on Monday, February 27, the financing for two projects which are part of the 2016-2019 National Housing Plan. The first one, with an approved amount of 200 million dollars, is aimed at transforming informal urban settlements of the Metropolitan Area of Buenos Aires. The purpose of this project is to invest in infrastructure for Villa 31, located in the City of Buenos Aires, and for Villa Carlos Gardel in Moron.

Said initiatives consider an investment of 170 million dollars for Villa 31 aimed at the improvement of the access to basic services (drinking water, sanitation, storm drains, public street lighting, electricity grids), and at the construction of 1,200 houses and the relocation of families that currently live below the Illia Freeway. Other 30 million dollars shall be allocated to Villa Carlos Gardel with the same objectives.

This way, the Project will benefit more than 48,200 people by means of a 29-year loan with a grace period of 6 years. In addition, the Province and the City of Buenos Aires will contribute 42.5 million dollars.

Likewise, the IBRD also approved the financing of 200 million dollars for the Comprehensive Housing Project to buy formal houses for those who do not have access to them. It aims at the improvement of the living conditions of inhabitants of poor settlements in Great San Miguel de Tucuman, Great Cordoba, Great Mendoza, Palpala in San Salvador de Jujuy and Mar del Plata – Batan.

This loan will make available the benefits from the “Solución Casa Propia” Program of PROCREAR, thus complementing the savings for the first house. The Project also aims at the improvement of services and public urban spaces and at the perfection of housing administration in federal, provincial and local bodies.

The 32.5-year loan with a 7-year grace period will benefit 3,000 families that will have access to their first formal house and 18,000 residents of poor settlements.

Finally, on Tuesday, February 28, the IBRD Board of Directors approved the provision of a 480-million dollar guarantee for up to 20 years for the FODER, aimed at the financing of sustainable energy investment. Within the context of the RenovAR Program of the Ministry of Energy and Mining, the objective of this program is to provide greater predictability to the private initiative in electric generation from renewable sources.

Caputo, as Argentine Governor before the World Bank, said that this guarantee “shows the reliability Argentina has achieved before multilateral credit organizations since the beginning of Macri’s Administration and the joint work of the Ministry of Energy and Mining and the Ministry of Finance and the World Bank to achieve the objectives of providing renewable energy for the country”.

This Project is part of the environmental agenda of the country and strengthens a cleaner energy matrix that allows the reduction of carbon emission. This way, the objective is that the 8% of the energy production for this year and the 20% for 2025 comes from renewable sources. Within this framework, Argentine Law No. 2791/15 of Renewable Energy created the FODER to promote the generation of wind, solar, biomass, biogas energy, and small hydro-electric projects.

FODER contributes to the building of confidence of national and foreign investors in Argentina. IBRD’s guarantee has a multiplier effect that attracts investment for 3.2 million dollars to the renewable energy sector in Argentina (6.7 times the amount of the guarantee).

Therefore, we develop closer ties with the World Bank as strategic partner of Argentina, organization that continues assisting the country through long-term financing for infrastructure projects.

The Board of Directors of the World Bank (WB) approved today a 20-year guarantee for USD 480 million to give stimulus to private investment in the development of renewable energy in Argentina, which is a key element for the diversification of the energy matrix through clean sources and a contribution to the mitigation of climate change.

“The World Bank’s support has helped our country to make in a few months the progress which had not been done in ten years for renewable energy, contributing to our objective of guaranteeing energy security and reducing the climate change impact”, said Juan José Aranguren, National Minister of Energy and Mining.

In particular, the World Bank will support the Fund for the Development of Renewable Energy (FODER, in its Spanish acronym) created to make available the financing of projects within the framework of the Program RenovAR. This initiative, promoted to comply with the stipulations set forth by Argentine Law No. 27191, encourages the generation of electricity through wind and solar technology, biomass, biogas, and small hydro-electric projects, aimed at “achieving a contribution of renewable energy sources up to 20% of the national electricity consumption, as of December 31, 2025”.

“This project encourages private investment in renewable energy that helps satisfy the growing demand of energy in the country with a clean source that strengthens sustainable development”, said Jesko Hentschel, World Bank Country Director for Argentina, Paraguay and Uruguay.

Of a total of 59 projects awarded to Rounds 1 and 1.5 of the Program RenovAR, 27 requested the guarantee of the World Bank, 12 of which are wind projects (721 MW), 10 of photovoltaic solar energy (306 MW), 4 small hydro-electric projects (4 MW) and 1 of biogas (1 MW).

The Finance Minister, Luis Caputo, as Argentine Governor before the World Bank, said that this guarantee “proves the confidence Argentina has achieved before multilateral credit organizations since the beginning of Macri’s Administration and the joint work of the National Ministry of Energy and Mining and the Ministry of Finance and the World Bank to achieve the objective of promoting renewable energy in the country”, and he added: “This guarantee is an example of the actual benefits for the Argentine people to achieve investment and financing for productive projects and for the development of infrastructure; in this case it is for a strategic area such as renewable energy”.

The Chief of Cabinet of the Ministry of Finance, Pablo Quirno, and the Undersecretary of International Financial Relations, Martín Soto, participated this Thursday of the joint meeting of the Boards of Governors of the Inter-American Development Bank (IDB) and the Inter-American Investment Corporation (IIC) in Washington. Within that framework, they discussed the Draft Agreement establishing MIF III.

The Multilateral Investment Fund (MIF), created in 1993, is one of the units of the IDB Group that designs and finances projects of the private sector with an innovative perspective. Since its creation, Argentina has contributed 28.3 million dollars to MIF and it has benefitted from 69 million dollars of non-refundable resources. In addition, it has received loans and capital investments (refundable resources) for 19 million dollars.

The MIF, in its 2016-2018 Business Plan, will work over three main strategic issues: Integrating Cities, Climate-Smart Agriculture, and Knowledge Economy. It will also include gender and diversity issues, as well as environmental and social sustainability, and will promote a favorable context for investments. Likewise, it will continue supporting small businesses and creating opportunities for vulnerable populations to mitigate poverty.

In addition, the next Inter-American Forum on Microenterprise (Foromic), organized by the MIF, will be held this year in Argentina. It is the most important annual event related to microfinance and business in the region and, after 18 years, it will take place in Argentina. The country hosted Foromic in 1999, a year after its creation.

It is important to consider that while MIF’s contributions are made by the Government, the main beneficiaries of technical cooperation and projects are micro, small, and medium enterprises and non-governmental agencies. Since 2016, MIF has approved projects for Argentina for more than 6 million dollars and it is likely that the country will benefit in the future from transactions for a higher amount than the one to be contributed for the replacement.

The Minister of Finance, Luis Caputo, signed this afternoon, together with the Minister of Internal Affairs, Public Works and Housing, Rogelio Frigerio, a loan for 120 million dollars with the Inter-American Development Bank (IDB) for the Program to Develop and Strengthen Provincial Management. This Program constitutes the background for future agreements to be executed during the next months.

The Ministers were also accompanied by the Governors from Corrientes, Ricardo Colombi, from Mendoza, Alfredo Cornejo, from Misiones, Hugo Passalacqua, from Neuquen, Omar Gutiérrez, and from Salta, Juan Manual Urtubey.

Within this context, the officials signed the commitment between the National Government and each Province to carry out the Program. It is aimed at contributing with growth through the improvement of the administration of income, expenditure, and public investment, as well as implementing infrastructure projects.

The Program has two elements: the strengthening of tax and financial administration and development investment. The first one is aimed at improving the Provinces’ fiscal autonomy and the efficiency of public expenditure; the second one will enable the financing of investments on strategic sectors of the economy.

The strengthening of tax and financial administration will allow developing the provincial abilities related to tax collection, financial administration and the management of the public investment cycle. The IDB will finance 36.4 million dollars and Argentina will invest 6.4 million dollars.

The Finance Minister, Luis Caputo, highlighted that “this program is a progress related to the strategic objective of the Government: to grow creating jobs with financial balance, fiscal responsibility and an equitable distribution of fiscal resources among the Provinces”.

In addition, the investment initiative for development is aimed at financing strategic sectors of each Province. In total, 96 million dollars will be invested, 81.6 out of which will be contributed by the IDB and 14.4 million by the National Government. This way, the estimated cost of the whole Program is of 141.2 million dollars.

In this sense, Caputo said: “With these resources we are going to finance strategic sectors of each Province to promote the economic growth and the creation of private jobs. In addition, it will be an appropriate instrument for a better management of the income and it will give priority to the quality of public expenditure in the provincial jurisdictions”.

The investments for development will benefit five Provinces with a total of 5.5 million inhabitants. Within the different works to be financed by the agreement with the IDB, we can highlight the improvement of the Costanera de Mendoza Avenue, the development of an industrial park in Salta, the i9mprovement of Route 40 in Nequen, and the construction of an aqueduct in Corrientes. It also includes the promotion of the Province of Misiones as a forest, touristic and energy alternative.