Completed Development AidData Chinese Aid

[China Co-Financing Fund] IDB administers $50 million loan from CHC for Financial System Reform Support Program II

$50M USD

Funder	People's Bank of China (PBC)
Recipient Organization	Government of Colombia
Country	Colombia
Start Date	Aug 15, 2017
End Date	Dec 05, 2033
Duration	5,956 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`85336`

Grant Description

[China Co-Financing Fund] IDB administers $50 million loan from CHC for Financial System Reform Support Program II On August 15, 2017, the Inter-American Development Bank (IDB) signed two loan contracts with the Government of Colombia for the Financial System Reform Support Program II: a $400 million loan that IDB issued from its ordinary capital (Loan 4074/OC-CO), and a $50 million loan from the People's Bank of China (Loan 4074/CH-CO) via the China Co-Financing Fund for Latin America and the Caribbean (CHC).

The $450 million of loan financing authorized by IDB was designed to cover the total project cost.

📋 Loan / Grant Terms

💰 Loan Amountcarries the following borrowing terms: a 20-year maturity

📅 Maturity20 years

This program included several components intended to increase the financial system's contribution to Colombia's growth: (1) enhancement of financing for productive development (particularly in the agricultural sector) and public-private partnerships through strengthening of public institutions and guarantee systems; (2) improving the regulation and monitoring process of the financial system to support the development of the capital markets and financial transparency; and (3) increasing financial inclusion for those without bank accounts by improving the volume, quality, opportunity, and access to financial services for the population.

The program also sought to improve access to financing for micro, small, and medium-sized enterprises (MSMEs).

Portions of the program, such as financial system transparency and development capital markets, were specifically aimed at meeting requirements to join the Organization for Economic Cooperation and Development (OECD).

Colombia's Ministry of Finance and Public Credit (Ministerio de Hacienda y Crédito Público) and the National Planning Department (Departamento Nacional de Planeación) were responsible for project execution. The final loan disbursement took place on August 29, 2017. This project has reached completion; however, its precise implementation start and end dates are unknown.

📋 Staff Comments

The CHC loan contract can be accessed in its entirety via https://www.dropbox.com/s/97oj37qtm4ksk3i/CONTRATO%20DE%20PR%C3%89STAMO%20No.%204074%3ACH-CO%20.pdf?dl=0.
For loan and debt rescheduling records with variable interest rates, AidData calculates the all-in interest rate at T0 based on the reference rate (such as LIBOR or EURIBOR) on the loan start date, plus any known margin. Please see the methodology for additional details.
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.
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 Project ID#86526.
The IDB refers to this project as ‘CO-L1214 : Financial System Reform Support Program II’. Financial System Reform Support Program I was not financed with support from the China Co-Financing Fund for Latin America and the Caribbean.
A full list of the reforms, programs, and financial instruments used to reach the goals of the Financial System Reform Support Program II can be found on pages 5-8 of the IDB's Project Close Report (Informe de Terminación de Proyecto).
The IDB lending spread data are drawn from https://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=EZSHARE-1436601171-376.

📚 Sources & References

CO-L1214 : Financial System Reform Support Program II
Colombia pushes forward financial system reforms with $450 million IDB loan
CONTRATO DE PRÉSTAMO No. 4074/CH-CO
CONTRATO DE PRÉSTAMO No. 4074/CH-CO
Current and Historic Loan Charges for Ordinary Capital Loans
Historic Rates and Loan Charges Flexible Financing Facility - USD and Single Currency Facility - LIBOR - USD
Informe de Terminación de Proyecto (PCR) - PROGRAMA DE APOYO A LA REFORMA DEL SISTEMA FINANCIERO
PROGRAMA DE APOYO A LA REFORMA DEL SISTEMA FINANCIERO Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.

All Grantees

Government of Colombia

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