Venezuela could access resources from the World Bank for up to 5 billion dollars over the next two years, in the reestablishment of relations with the multilateral organization. The possibility was raised by Susana Cordeiro Guerra, vice president of the bank for Latin America and the Caribbean, who clarified that any disbursement will depend on certain conditions being met and the approval of its management bodies.
The institution studies alternatives to support the country’s priorities, both through its operations with the public sector and through initiatives aimed at the private sector. According to Cordeiro Guerra in an interview given during the annual meetings of the International Monetary Fund (IMF) and the World Bank, held in Bangkok, the resources would be destined to promote reforms and address fundamental needs.
According to Bloombergthe representative of the organization specified that a first operation of 500 million dollars has already been identified, focused on projects related to water and electricity supply. He also noted that Venezuela could receive up to $2 billion during the first year, provided it regularizes its pending financial commitments with other multilateral lenders.
“We have developed a portfolio of projects that we can provide financing for, that we feel comfortable with and that we would like to pursue, and we are waiting for the arrears to be cleared so we can continue,” Cordeiro Guerra said.
Venezuela must settle international commitments to access financing
The World Bank has not granted a loan to Venezuela since 2005. The reactivation of its financing will depend, among other factors, on whether the country resolve overdue debts that it maintains with international organizations. These include more than $2 billion in principal and interest outstanding with the Inter-American Development Bank (IDB), as well as overdue commitments with the Development Bank of Latin America.
Cordeiro Guerra also warned that any financial assistance initiative must have the endorsement of the World Bank executive council. Therefore, the amounts mentioned represent financing possibilities subject to compliance with the requirements established by the institution, and not resources approved in their entirety.
In April, the organization and the IMF resumed dialogue with the Venezuelan government, headed by interim president Delcy Rodríguez. Since then, the World Bank has also worked with the authorities on the development of a macrofiscal framework and on issues related to the restructuring of external debt, the amount of which is estimated at nearly $170 billion, according to private estimates.
As part of its return to the country, the institution plans to soon appoint a resident representative and open an office in Caracas before the end of the year, according to what was stated by Cordeiro Guerra.
The rapprochement between Venezuela and the World Bank occurs in a new scenario of relations with the United States, whose presence in the country has become relevant in the process of resuming contacts with international financial organizations.
