finance

IDB, MEF agree to loan deal

The Inter-American Development Bank (IDB) and the Ministerio de Economía y Finanzas (MEF) agreed last Friday on terms for a $90 million loan that will be used to help develop the country's agricultural sector.

The funds will be used to augment existing programs as well as to begin new initiatives. It will include the expansion of irrigation systems as well as to build roads and extend utility service to rural areas.

The loan is not expected to increase Panama's debt to the IDB, which stands at $868 million, because the money will replace other programs that have been scheduled to receive funding over the next three to five years.

Gina Montiel, Central American manager of the IDB, will be visiting other regional countries to implement similar programs.

The IDB is attempting to address rising food prices by seeking to expand production in Central America. This expansion should, somewhat, protect residents from increasing food prices.

“We have to make the agricultural sectors more competitive,” Montiel said.

While in Panama, Montiel met with representatives of the Autoridad del Canal de Panama to discuss the expansion project. The IDB is following the project, but has not decided if the institution will seek to become involved in its financing.