Jamaica should receive inflows of around US$950 million by April 2009 from the multilaterals, Prime Minister Bruce Golding has confirmed.
This is in keeping with the stated position of his administration to actively engage the multilateral institutions for assistance.
This is also reflected in the Revenue Estimates for the current fiscal year where borrowing from the multilaterals was estimated at $52.73 billion - an increase of $34.19 billion or 184 per cent over the loan receipts to the Consolidated Fund in FY 2007-08.
In the case of the relationship with the Inter American Development Bank (IDB), the bank is said to have US$600 million in loans to Jamaica over the next three years.
The IDB is currently the leading lender to Jamaica among the multilateral lending institutions.
As at February 2008, the country's outstanding debt to the IDB stood at US$583.2 million, representing 12 per cent of total public external debt and 35 per cent of outstanding multilateral debt.
Public sector loans account for US$581.8 million, while loans to the private sector totalled US$1.4 million.
Since that time, the IDB has approved a further three policy-based loans, the first tranche of which totalled US$120 million (J$9.6 billion) as follows:
Competitiveness Enhancement Programme, US$30 million;
Education Sector Reform, US$30 million;
Public Financial and Performance Management Programme, US$60 million.
The policy-based loans are to be issued in three tranches, with two disbursements to follow, placing their combined value at US$360 million.
The IDB Country Representative, Gerard Johnson, has indicated that in the past the IDB would have issued a loan for US$180 million in the case of the Public Financial and Performance Management Pro-gramme, but this would have incurred carrying costs.
Under this current arrangement with the IDB, the three loans in each programme are linked, and there are triggers or conditionalities set out in the first loan contract under which the second and third segments will kick in.
The funds are disbursed upfront.
In other words, as soon as the loan documents are signed by the Jamaican Government, the funds are released shortly thereafter by the IDB and wire transferred to the GOJ.
The loans are financed 100 per cent by the IDB, Jamaica does not have to find matching funds. And, because they are policy-based loans, they are not set out in the Estimates of Expenditure for the current Fiscal Year, but instead are noted in the Revenue Estimates which were laid out in the Financial Statements and Revenue Estimates 2008/09.
There is a five-year mora-torium on principal repayment, which is repayable over 20 years.
Interest is payable in semi-annual instalments, at a variable rate based on the US 3-month LIBOR.
It anticipated that the second loans for each of the three programmes will be approved and disbursed in the upcoming financial year, 2009/10.
The IDB in December also approved a US$14 million (JA$1.2 billion) supplemental loan which will be used by the Ministry of Education to complete the civil works on the Primary Education Support Project (PESP).
The project was originally approved in 2000 and targets the creation of additional classroom space in basic and primary schools with the building of two new schools, the complete replacement of three existing schools, partial replacement of another three, and expansion of four.
The PESP target is to create 4,935 new classroom places.
However, cost overruns and inflation in the construction industry are hampering the completion of the final phase of the project, hence the need for the supplemental loan facility.
The Ministry of Education has also received a further US$11 million (J$880 million) to finance on-the-job training/experience for unemployed youth through the National Youth Service, dissemination of information at the Youth Centres, and labour intermediation services.
The Prime Minister also announced that the Government hopes to shortly conclude nego-tiations with the IDB for the provision of a US$300 million (J$24 billion) facility which will be made available through the Development Bank of Jamaica and the commercial banks for on-lending at concessionary rates to the private sector.
credit risk exposure
It should be noted that this facility is separate and apart from the Risk-Sharing Guarantee Facility of US$200 million which the IDB has made available earlier this month to FirstCaribbean International Bank (FCIB).
This facility is intended for use by FCIB in making loans to Jamaican businesses, but later expanded to other Caribbean countries.
Under this facility FCIB will lend US$400 million (J$32 billion) to private sector companies in US dollars or local currency - covering existing and new loans in this portfolio.
The IDB will share the credit risk exposure through a partial guarantee on these loans up to a maximum of the lesser of 50 per cent of the loan or US$20 million. The tenor of the partial guarantee facility would match the tenor of the existing loan up to a maximum of 25 years.
The other major facilities in the pipeline are the possibility of another US$300 million (J$24 billion) from the IDB in liquidity support for the upcoming budget, and a Develop-ment Policy Loan from the World Bank to support the public sector reform process - similar to the IDB's policy-based loans - for around US$150 million.
These negotiations are currently ongoing, and the amounts to be approved have not yet been finalised.
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