Narrative
Full Description
Project narrative
On December 18, 2015, the Inter-American Development Bank (IDB) signed two loan contracts with the Government of Barbados for the Strengthening Strengthening Human and Social Development in Barbados Project: a $5 million loan that IDB issued from its ordinary capital (Loan 3542/OC-BA), and a $5 million loan from the People's Bank of China (Loan 3542/CH-BA) via the China Co-Financing Fund for Latin America and the Caribbean (CHC). The $10 million of loan financing authorized by IDB was designed cover the total project cost. The IDB approval date for this loan financing was September 21, 2015, and it refers to this project as ‘BA-L1032 : Strengthening Human and Social Development in Barbados’. The CHC loan carries the following borrowing terms: a 25-year maturity, a 5.5-year (66-month) grace period, a 0.75% commitment (credit) fee, no management fee, and an annual interest rate of 3-month LIBOR plus a 0.5% funding margin (also known as the ‘Bank’s Cost of Funding’) and a 1.15% IDB lending spread. As of June 2021, the IDB and CHC loan had jointly achieved a 29.71% disbursement rate (with $2,971,470.78 being disbursed and $7,028,529.22 not yet being disbursed). The project’s executing agency is the Ministry of Social Care, Constituency Empowerment and Community Development of the Government of Barbados. The project is intended to increase financial security through access to job training and employment, especially for poorer families. The $10 million loan was to be used for a broad swathe of initiatives including creating a Management Information System for the government that will improve internal communication and accountability. It will also be used to promote health and human capital among 2,000 Barbadians through daycare services, school meals, school textbooks and uniforms, remedial learning courses, and selected health promotion services. Additionally, the program will seek to aid 8,000 more Barbadians through job counseling services, better local labor market information, and offering demand-driven technical training courses for unemployed youths. The Barbados Information Service indicated in February 2017 that the project was being implemented.
Staff comments
1. The CHC loan contract can be accessed in its entirety via https://www.dropbox.com/s/y7t5iktnxcosbj0/LOAN%20CONTRACT%20No.%203542%3ACH-BA.pdf?dl=0. 2. The China Co-Financing Fund for Latin America and the Caribbean was established on January 14, 2013 with a contribution of $2 billion by the People's Bank of China. It is administered by the IDB. For more information, see umbrella Record ID#86526. 3. As of 2011, Barbados was no longer ODA-eligible. 4. AidData has estimated the all-in interest rate (1.97%) by adding average 3-month LIBOR in the fourth quarter of 2015 (0.32%) to the funding margin during the fourth quarter of 2015 (0.5%) and the IDB lending spread during the fourth quarter of 2015 (1.15%). 5. According to the CHC loan contract, the ‘Bank's Cost of Funding’ means a cost margin calculated quarterly relative to a three (3)-month LIBOR Dollar Interest Rate, using the weighted average cost of funding instruments applicable to the Flexible Financing Facility, expressed in terms of an annual percentage, as determined by the Bank. AidData identified this cost margin via https://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=EZSHARE-1436601171-376. 6. The IDB lending spread data are drawn from https://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=EZSHARE-1436601171-376.