WASHINGTON, D.C., December 7, 2022 – The World Bank Board of Directors approved a US$ 500 million unrestricted loan for Ecuador which, together with a US$ 30 million non-reimbursable grant from the Global Concessional Financing Facility (GCFF) provided with the support of the United States and Canada, will support government efforts to promote inclusive, resilient, and low-carbon development.
The approved operation is the second in a series of three loans to enable the Ecuadorian government to continue implementing policies to overcome structural challenges in an effort to achieve fiscal sustainability, promote job creation, protect the most vulnerable populations, strengthen low-carbon development and fulfill the country’s commitment to achieving carbon neutrality by 2050. The World Bank Board of Directors approved the first operation, for US$ 700 million, in February 2022.
"Ecuador inspires confidence in the world for the responsible and transparent management of the economic policy of the government of President Guillermo Lasso. The World Bank's support is fundamental for the sustainability of Ecuador's public finances and to strengthen social programs that protect vulnerable families. Fiscal order with a social focus, productive reactivation to generate employment, and environmental protection are priorities for Ecuador," said the Minister of Economy and Finance, Pablo Arosemena Marriott.
The new operation has two pillars. The first supports critical elements of the economic, social and integral security areas of the Opportunity Creation Plan. Among other objectives, this Plan seeks to ensure the sustainable, transparent management of public finances, improve risk management, protect families and promote the social inclusion and climate resilience of vulnerable groups. The second pillar supports the ecological transition area, which promotes green growth through a low-carbon economy and climate change mitigation and adaptation measures.
"Through this second financial support operation, the World Bank recognizes the efforts of the Government of Ecuador to achieve sustainable growth and protect the most vulnerable groups, improving inclusion and social resilience," said Marianne Fay, the World Bank director for Bolivia, Chile, Ecuador and Peru. “Through the GCFF this operation also supports the country in registering and legalizing the migrant population to maximize the benefits of migration for both immigrant and host communities.”
The variable rate loan has a maturity period of 18 years, including a four-year grace period.
Ecuador receives a US$ 30 million grant from the Global Concessional Financing Facility (GCFF)
Ecuador also receives a US$ 30 million grant from the GCFF, a financial intermediary fund managed by the World Bank that supports the efforts of middle-income countries in addressing the needs of refugees and host communities. These funds support Ecuador’s efforts to guarantee the rights of the Venezuelan refugee and migrant population and their integration in the country. The GCFF grant for Ecuador was made possible by contributions from the United States and Canada.
More than 502,000 Venezuelan refugees and migrants reside in Ecuador, being the third-largest host nation of the more than 7.1 million Venezuelans who have fled their country since 2018. To reduce the vulnerability of migrants, in September 2022, the Ecuadorian government announced a special registration and regularization process. The registration step of this process, led by the Ministry of Interior, entails the creation of an updated registry of migrants of all nationalities, who are required to include their personal identity information and socio-economic characteristics in the registry. The registry will help increase the government's capacity to plan and implement public policies to integrate this population. Registered migrants also receive protection from deportation and migration-related fines. The regularization step of this process which is led by the Ministry of Foreign Affairs and Human Mobility, enables, in its first phase, Venezuelan migrants who entered the country regularly to apply for a special temporary residence visa (VIRTE). GCFF resources will support these critical steps for the economic and social integration of Venezuelan migrants. In addition to this grant, the GCFF also disbursed funds to the country in May 2020 (US$ 6 million) and November 2020 (US$14.1 million).
"Ecuador is helping lead the way on protection of refugees and migrants. The United States strongly supports Ecuador in strengthening the legalization process and facilitating integration with host communities,” said Eric Meyer, Deputy Assistant Secretary at the U.S. Department of Treasury. “GCFF, with a country-owned model and a results-based framework, is an effective platform to assist refugees and the countries that host them.”
The GCFF (https://globalcff.org/) was established in 2016 to provide concessional financing to support middle-income countries (MICs) that provide a global public good by hosting large numbers of refugees. The Facility is a partnership that brings together refugee hosting countries, donor countries, multilateral development banks, and the United Nations.
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