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.