The Multilateral Credit Organizations are the Inter-American Development Bank (IDB) and the World Bank (WB or IBRD).
The Province of Buenos Aires currently has 21 lines of financing that correspond to credits granted by these Organizations, of which 8 correspond to Direct Loan Contracts entered into between the Province and the Multilateral Organization and the remaining 13 correspond to Subsidiary Loan Contracts that are between the Province and the National Government and in turn between the latter and the Bank.
Of the total financing lines contracted with the IDB and IBRD, 4 correspond to loans that can be lent by the Province to its Municipalities.
The funds from these loans are mainly used to finance projects in the following sectors:
a) infrastructure: energy, transport, communications
b) social: health, sanitation, urban development, education, environment
c) modernization of the State and institutional development
For further details of the financial products offered by both Multilateral Organizations, refer to the following links:
http://www.iadb.org
http://www.worldbank.org
Contract Types: Direct and Subsidiary.
Direct Loan: entered into between the Province and the Multilateral Organization (IDB or IBRD).
Subsidiary Loan: entered into between the Province and the National Government. This agreement is signed within the framework of a previous Loan Agreement signed between the National Government and the Multilateral Credit Organization, therefore the Province can access a portion of the total loan that was granted by the Multilateral Credit Organization to the Government. National.
Legal Authorization: all loans contracted by the Province (Direct and Subsidiary) require an indebtedness authorization that is formalized through a Law, in accordance with Article 47 of the Province Constitution.
What does the Indebtedness Law authorize?
• The maximum amount to which the Province can borrow to finance the program to be carried out with Bank funds. In the case of subsidiary loans, this amount can be increased by a certain percentage while there are funds available from the loan received by the National Government.
• Defines the destination of the funds that were borrowed.
• Approves the Direct or Subsidiary Loan Agreement.
• Defines the loan guarantee: the resources from the Federal Tax co-participation (Law No. 23,548 and its amendments).
• Defines that the norms, rules, formalities, operations and procedures established both in the Loan Contract and in the Subsidiary Loan Agreement will prevail over local legislation.
For more information, refer to the Provincial Directorate of International Organizations.