IDB launches US$8bn credit lines to deal with crises, disaster

The IDB has launched two new contingent credit facilities for up to US$8bn, aimed "to help [Latin American and Caribbean] countries deal beforehand with shocks caused by external financial crises and another to help nations cope with the aftermath of natural disasters," an official statement said. A US$6bn development sustainability contingent credit line (DSL) has been designed to allow the IDB's 26 borrowing members to support their "poorest citizens from sharp fluctuations in commodity prices, global liquidity crises and other exogenous factors," the statement reads. The DSL, which will be available through 2014, is capped at a maximum of US$300mn per country, or 2% of a country's GDP, whichever is lower, with countries getting the contingency line approved before the event takes place. It replaces a previous US$3bn emergency lending facility. A separate contingent credit line for natural disasters will provide the IDB's borrowing members with financial support for as much as US$2bn in the occurrence of a natural disaster. The country limit is US$100mn or 1% of GDP, whichever is lower. In addition, a separate and currently available contingent credit facility for natural disasters is being expanded.