The consequences caused by the pandemic have led global governments to rely on expansive monetary policies and sources of financing from multilateral organizations to address the health, economic and social crisis resulting from covid-19.
In this regard, the Central American Bank for Economic Integration (CABEI) is developing a work agenda aimed at supporting the financial and private sectors of its member countries with new programs and incentives, with the objective of guaranteeing sustainable economic recovery over time, as well as strengthening regional unity in order to prevent future crises.
Within these plans, the Dominican Republic occupies an important position as one of its most valued partners in the Caribbean region.
“We are on an agenda of economic reactivation of the entire region and that is the reason why we are in the Dominican Republic, working together with all the governments to return to that normality (before) the pandemic (and) help recover the employment issue (…) (because) the States have already done enough. They are in debt, so we want to support them with public policies so that the private sector can do its part,” explained CABEI Executive President Dante Mossi.
Projects
Among the projects in CABEI’s portfolio, Mossi highlighted the construction of a railway line connecting the cities of Santo Domingo and Santiago, “a major project” that will put the country “on the map of international investors”. The project is under feasibility studies and has the backing of US$630 million as part of a collaboration agreement between the multilateral organization and the Korean government.
Mossi also stated that the President of the Republic, Luis Abinader, requested CABEI’s assistance for the development of the Pedernales tourism project, an initiative that seeks, through a public-private partnership, to attract investments that will boost the economy of the entire southern region through the promotion of tourism in that area.
Environmental sustainability is one of CABEI’s key areas of work as an entity certified by the United Nations Green Climate Fund for Climate Change. In this regard, CABEI is interested in making investments that help generate more resources from renewable funds.
This has led to the financing of the third phase of the Montegrande dam, a “flagship project” that has received US$249.6 million from the Bank for its development. Also the Palomino hydroelectric complex, which is expected to generate 80 watts of clean energy and which has received funds of US$130 million, and the support for the construction of the gas pipeline that the company AES Dominicana has in San Pedro de Macorís, for which it has earmarked a loan of US$54 million.
Dante Mossi also listed other initiatives under study, such as the modernization of the port of Haina, a project to contribute to the development of the agricultural sector, and initiatives to improve road mobility, such as financial assistance for the Coral highway project and the expansion of the Eastern Road Corridor. “We are very pleased that the Dominican Republic is expanding its participation within CABEI, which is always good news for us,” he said.
Credit line
In addition to these macro projects, CABEI has lines of credit open to support the private sector, especially small and medium-sized entrepreneurs in the industrial sector, which it channels through Banco Popular, Banreservas and, recently, the National Export Bank (Bandex).
Mossi explained that each of these banks has its own market niche, and that CABEI is “actively seeking” other financial intermediation entities through which it will be possible to channel funds to workers in rural communities.
Due to the pandemic, CABEI prepared an emergency program that expanded the program from US$350 million to US$650 million. This program includes a Guarantee Fund, an instrument that guarantees up to 75% of the total amount of the loan requested, leaving it up to the entrepreneur to guarantee only 25%.
The requirements for access are that the applicant be a small entrepreneur, have a functioning business, demonstrate that he/she lost his/her job during the pandemic, and that he/she was in good financial health prior to covid-19.
Aspirations
CABEI’s executive president explained that now, more than ever, the entity seeks to strengthen multilateral relations among its member members, for which it has prepared a business forum to be held in Punta Cana, in which high-level representatives of the private sector from all Central America will participate.
