–in fight against COVID-19, other adversities

IN response to the debilitating effects of COVID-19 on the lives and livelihoods of millions of people in Latin America and the Caribbean countries, the World Bank Group deployed a record $29.1 billion to that region between April, 2020, and June, 2021.
Those funds- the largest crisis response of any such period in the institution’s history – were disbursed to fight the pandemic’s health, economic, and social impacts, as well as support the region’s response to challenges such as hurricanes and migration.
The institution’s commitments and mobilisations during this period included a combined $14.5 billion from the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA); $10.8 billion from the International Finance Corporation (IFC) to promote private sector-led sustainable development, and $3.8 billion in guarantees by the Multilateral Investment Guarantee Agency (MIGA).

“Latin America and the Caribbean was the region hardest hit by the COVID-19 pandemic, with 20 per cent of global cases and a third of global deaths. The high infection rates and sharply contracting growth have had devastating social and economic impacts,” World Bank Vice-President for Latin America and the Caribbean (LAC), Carlos Felipe Jaramillo, said.
Further, he related: “Since the pandemic began, we have moved quickly to provide substantial, new funding to help countries tackle the crisis and provide relief to the most vulnerable.”
The World Bank’s financing and expertise this fiscal year focussed on social protection, health emergencies, tests, vaccines and strengthening countries’ health systems, as well as record deployment of short-term finance during the first months of the pandemic to help the private sector stay afloat.
The IFC, the private sector arm of the World Bank Group, committed $10.8 billion in Latin America and the Caribbean, including the mobilisation of $5 billion and short-term finance of $2 billion, driven by increased demand for fast-track financing for the manufacturing, agri-business and services sectors, continued support for the financial industry and successful engagements to establish Public-Private Partnerships (PPPs) in the region.

Since April, 2020, when IFC kickstarted its COVID-19 response, it committed close to $3.2 billion in liquidity support for the region, which has helped expand lending to Micro, Small and Medium Enterprises (MSMEs) so they can continue operations.
The IFC also worked with financial institutions to promote green financing, and supported export-oriented agri-businesses in the region.
“IFC has been stepping up to offer innovative solutions to support sectors severely affected by the pandemic, with a focus on helping companies preserve jobs and ensuring that MSMEs can access financing,” IFC’s Vice-President for Latin America and the Caribbean, Europe and Central Asia, Georgina Baker, said, noting: “We also continue to open new paths to greening the region’s financial system and promoting greater financial inclusion for women.”
Almost 40 per cent of IFC’s own account investments in the last fiscal year were aimed at financing climate-smart solutions.
The corporation provided one of the first sustainability-linked loans to Corsan, a water and sanitation services provider in Brazil, to reduce water losses in the distribution system and boost energy efficiency in its operation.

Additionally, around $1 billion was set aside for greater financial inclusion for women, representing 66 per cent of IFC’s total commitments in this area during the last fiscal year.
Further, MIGA, the world’s largest political risk insurance provider, whose mandate is to help drive impactful foreign direct investment (FDI) to developing countries, issued a little over $3.8 billion in new guarantees in Latin America and the Caribbean over the 15-month period.
The agency’s commitment to improving the lives of citizens in LAC, who have been especially hard hit by the COVID-19 pandemic, is strong; roughly half of all new MIGA guarantees in the fiscal year were issued in the LAC region.
It also supported eight new projects in eight LAC countries during the fiscal year. Some 98.6 per cent of those new issuances were through MIGA’s $6.5 billion COVID-19 Response Programme.

An example of MIGA’s efforts to deliver tangible development impact in the face of the pandemic is its first ever engagement in The Bahamas.
MIGA issued guarantees on loans extended to The Bahamian government. These loans will be used to modernise two public hospitals and provide financing to micro, small and medium enterprises.
“MIGA worked closely with governments, businesses, and financial institutions in LAC to deploy its guarantees and secure private foreign capital resources to complement efforts towards mitigating the social and economic impacts of the pandemic,” MIGA’s Vice President and Chief Operating Officer S. Vijay lyer, related.
He added: “In addition to MIGA projects securing better health outcomes for citizens, FY21 projects in LAC contributed to expanding the credit available to small and medium enterprises, financing climate measures and building resilience.”