12/14/2006 CDB Approves Belize Country Strategy Paper and Two Loans to Belize

Government of Belize Ministry of Finance
http://www.belize.gov.bz/press_release_details.php?pr_id=4163

CDB Approves Belize Country Strategy Paper and Two Loans to Belize
Belmopan - 14 December, 2006

The Board of Directors of the Caribbean Development Bank [CDB] at its meeting today in Barbados approved the Bank?s Country Strategy Paper for Belize for the period 2007 ? 2009. The Bank also approved a US$25 million Policy Based Loan for Belize and a US$12.6 million loan to finance the upgrading of the Placencia Road.

The main objectives of CDB?s Strategy for Belize during the 2007-2009 period are to enhance sustainable economic growth by (a) supporting attempts to correct fiscal and external imbalances; (b) financing investments that are critical for enhancing growth; (c) lending to eligible private sector entities; and (d) financing critical social development projects. CDB?s assistance will also seek to promote good governance and to foster inclusive social development.

The Policy Based Loan amounts to US$25 million and is comprised of US$15 million from CDB?s Ordinary Capital Resources [OCR] and US$10 million from CDB?s Special Fund Resources [SFR]. The OCR portion of the loan is to be repaid in 20 years, including a grace period of 5 years, at a variable interest rate which is currently 6.25% per annum. The SFR portion of the loan is to be repaid in 25 years including a grace period of 5 years, at an interest rate of 2.5% per annum. This loan is to be disbursed in two tranches, the first of which is expected during the first quarter of 2007, once the ongoing debt restructuring process has been successfully completed.

The PBL is designed to support the efforts of the Government of Belize to address the most critical challenges facing Belize currently: the correction of the fiscal and external imbalances. The PBL is intended to help the Government of Belize close these gaps over the short to medium term while it continues to implement corrective measures, including the restructuring of its debt, the reform of its tax regime and the control of public expenditure.

CDB also approved a loan of US$12.5 million, from OCR funds, for the upgrading of the Placencia Road at an interest rate of 6.25%. This loan has a grace period of 5 years and repayment will be made over 17 years beginning in year 6. This project is expected to begin implementation early in 2007.

Belize is represented on the CDB Board of Directors by Dr Carla Barnett, Financial Secretary.