Buenos Aires — After reaching an agreement with the International Monetary Fund and the approval of a $1 billion loan from the Andean Development Corporation (CAF), the Inter-American Development Bank (IDB) approved on Thursday a $100 million loan to Argentina.
The funds will be used to “improve the productivity and commercialization of its agro-industrial production with a focus on adaptation to climate change”.
According to the IDB, the loan has an amortization period of 25 years and a grace period of 5.5 years. The program also has a co-financing of $150 million from the European Investment Bank and a local counterpart of $65 million.
The objective of this agreement is to “encourage the adoption of technologies that promote environmental sustainability, adaptation to climate change, and economic profitability by small and medium-size agricultural producers and agribusiness MSMEs”, according to the terms of the loan.
This new loan comes in an attempt to alleviate the effects of one of the worst harvests in Argentina’s history, due to the severe impact of the drought, which generated a $20 billion drain on the central bank’s coffers.
“The sector, which represents 9.1% of GDP, faces significant challenges and its growth has stagnated in recent years,” the IDB explained.
This program is expected to directly benefit nearly 25,000 rural producers and users, agribusiness MSMEs, associations and cooperatives of rural producers.