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IADB to offer

partial loan

guarantees

WASHINGTON: The Inter-American Development Bank said it will be able to provide investors partial loan guarantees, a move that will broaden its ability to assist countries in Latin America.

The Bank last year adopted a policy of providing five percent of its annual lending to the private sector without a sovereign guarantee from a country.

Under its new policy, the lending institution could partially guranatee loans to help finance both private and public projects, although the emphasis would be on private activities. All of the 26 borrowing members of the Bank would be eligible to use the guarantees, alone or in conjunction with a Bank loan, and it is hoped that the new program will serve as a catalyst for additional new investment, the Bank said.

Besides giving a partial guaranty for debt, the program would offer some protection for borrowing in the capital markets to obtain longer maturities.-Reuter