LA PAZ, May 14, 2020 – The World Bank Board of Directors today approved a loan and two credits (one of which is concessional) totaling US$254 million for the Plurinational State of Bolivia. This financing will be used to help the country fund temporary cash transfers to poor and vulnerable households with school-aged children, people with disabilities, elderly members and informal workers affected by the measures adopted to contain the Covid-19 pandemic.
The project “Emergency Safety Nets for the Covid-19 Crisis” seeks to reduce the economic consequences of the health emergency and support the ability of households to implement social distancing to avoid further loss of life and human capital.
Through three components, the project will partially finance Family, Household Food Basket and Universal benefits, directly benefiting some 3.6 million people. Additionally, the project will cover the cost of the payment system through the financial sector.
“This operation aligns with our mission to end extreme poverty and promote shared prosperity and is in the framework of the World Bank Group’s immediate institutional response to the Covid-19 pandemic,” said the World Bank Director for Bolivia, Chile, Ecuador and Peru, Marianne Fay. “In this case, we are supporting Bolivia during this difficult time for its economy, recognizing the important impact that safety nets have for households to respond to a crisis such as the one triggered by the outbreak of this virus,” she said.
The funds originate from a US$200 million loan from the International Bank for Reconstruction and Development (IBRD), which has a 24-year maturity period, a 14-year grace period and a six-month Libor rate with a 1.40 percent margin; a US$21 million non-concessional credit from the International Development Association (IDA), with a 21-year maturity period, an 18-year grace period and a six-month Libor rate with a 1.40 percent margin; and an IDA concessional credit for US$33.3 million with a 30-year maturity period, five-year grace period and an interest rate of 1.25 percent plus the basis adjustment for interest charges, for a total of US$254.3 million. The IBRD and the IDA are part of the World Bank Group.
World Bank Group response to the Covid-19 (coronavirus) pandemic
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. We are increasing disease surveillance, improving public health interventions, and helping the private sector continue to operate and sustain jobs. Over the next 15 months, we will be deploying up to US$160 billion in financial support to help countries protect the poor and vulnerable, support businesses, and bolster economic recovery, including US$50 billion of new IDA resources in grants or highly concessional terms.
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