The Multilateral Credit Organisms are the Inter-American Development Bank (IADB) and World Bank (WB).
The Province of Buenos Aires currently has 25 financing lines from loans granted by these Organisms, of which 4 correspond to Direct Loan Agreements signed by the Province and the Multilateral Organism and the remaining 20 correspond to Subsidiary Loan Agreements signed between the Province and the federal government and the latter and the Bank.
Of all of the financing lines contracted with IADB and WB, 4 correspond to loans which can be loaned by the Province to the Municipalities.
The loan proceeds are mainly allocated to finance the following projects:
a) Infrastructure: energy, transport, communications
b) Social: health, sanitation, urban development, education, environment
c) State Modernization and Institutional development
For more information of the financial products offered by this Multilateral Organism go to:
http://www.iadb.org
http://www.worldbank.org
Types of Loan: Direct and Subsidiary.
Direct loan: it is signed between the Province and the Multilateral Organism (IADB or WB).
Subsidiary Loan: it is signed between the Province and the federal government. This agreement is signed within the framework of a Loan Agreement which was previously signed between the federal government and the Multilateral Credit Organism, therefore the Province is entitled to a portion of the loan which was granted to the federal government by the Multilateral Credit Organism.
Legal Authorization: all of the loans contracted by the Province (whether they be Direct or Subsidiary) should be authorized by law, pursuant to Section No 47 of the provincial Constitution.
What does the Borrowing Law authorize?
• The maximum amount for the Province can incur into debt to finance the program with the funds from the Bank.
As for the subsidiary loans, this amount may be increased by % provided that there are available funds form the loan received by the federal government.
• Defines the use of proceeds form the loan. • Approves the Direct or Subsidiary Loan Agreement. • Defines the loan guarantee: Federal Tax Co-participation funds (Law Nº23.548). • Defines that the rules, laws, steps, operations and procedures established both in the Loan Agreement and the Subsidiary Loan Agreement will prevail over local legislation.
For more information go to Provincial Office of the International Organisms.