Uruguay to Stimulate Economic Recovery with $145 Million IDB Loan

Uruguay will spur its post-pandemic economic and fiscal recovery with help from a $145 million loan from the Inter-American Development Bank (IDB).

This is the second operation in a series of policy-based loans, made up of two contractually independent but technically linked loans aimed at supporting Uruguay’s post-pandemic recovery. The first operation of $350 million was approved in 2020.

This second operation will contribute to strengthen the countercyclical effects of fiscal policies by introducing temporary measures to protect the income of vulnerable households and helping increase the liquidity of micro, small and medium-sized enterprises (MSMEs). It will also foster the provision of essential goods and services through a series of policy and public management moves and promote economic and fiscal recovery.

The project will benefit Uruguay’s population at large, and particularly those in the most vulnerable sectors. More specifically, it will directly benefit 15,000 workers with a workforce integration program, and more than 3,000 domestic workers (97% of whom are women with overrepresentation of Afro-descendants) with a special unemployment subsidy program.

In addition, more than 15,000 MSMEs will gain access to an emergency guarantee line; more than 400,000 students will get free internet access to the Plan Ceibal’s educational platforms; and more than 2 million people will benefit from the development of multiple functionalities of the Coronavirus UY app.

This operation is in line with Vision 2025 – Reinvesting in the Americas, created by the IDB to promote economic recovery and inclusive growth in Latin America and the Caribbean in the areas of support to SMEs, gender and inclusion, and climate change.

The IDB’s $145 million loan has a 20-year term, a grace period that will be determined at the time of resource disbursement, and an interest rate based on LIBOR.