REMARKS. Ms. Deidre Clarendon Division Chief Social Sector Division Caribbean Development Bank Launch of the

Transcription

1 REMARKS Ms. Deidre Clarendon Division Chief Social Sector Division Caribbean Development Bank Launch of the Seventh Consolidated Line of Credit to the Development Finance Corporation of Belize Radisson Fort George Hotel Belize City Tuesday, May 12, 2015

2 - 2 - Salutations On behalf of the President and staff of the Caribbean Development Bank (CDB), I wish to join Mrs. Natalie Ewing Goff..in welcoming you to this ceremony launching the Seventh Consolidated Line of Credit to the Development Finance Corporation of Belize. Consistent with our development mandate CDB has supported the national development priorities of the government and people of Belize with more than $400 USD over the past four decades. CDB has assisted DFC by providing approximately USD45 mn directly to the institution and USD17 mn indirectly through central government. This new loan of $10.5 mn is a continuation of CDB s support and it is noteworthy that this loan is directly to DFC following an independent consultant s assessment that this new DFC conforms to current best practices with respect to the implementation of good corporate governance measures. The expected outcomes of this project are: 1. Increased number of skilled graduates from poor households 2. Improved standard of living for low and lower middle income household; and 3. increased awareness and usage of energy efficiency and renewable energy modalities.

3 - 3 - Like you, CDB recognises the central importance of human capital formation and the critical role of institutions like the DFC in the provision of affordable student loan financing. Higher education has also contributed significantly to poverty reduction here in Belize and across the Region. For decades, access to higher education has enabled many of our people in the lower socio-economic strata to acquire the knowledge and skills needed to take advantage of employment opportunities, improve the quality of their lives and transition out of poverty. CDB has supported the GOBZ in enunciating a vision for the sector by financing the development of the Education Sector Strategy, developed in 2011, and the current Education Sector Reform Project (ESRP). This Seventh Consolidated Line to DFC will provide USD2.5 mn for students pursuing tertiary and technical education. This includes an allocation of USD0.5 mn to fund students from financially disadvantaged households, who have the academic capability and qualifications, but are constrained by low and irregular income and their inability to meet security requirements for the loan. It has been recognised that poverty is multi-faceted and living conditions, particularly housing is a critical dimension of the poverty reduction paradigm. The housing stock in Belize has not kept pace with the growing population and urbanisation with the demand for housing increasing in both urban and rural communities. The demand for housing has been facilitated by external and internal financing, grants and loans, provided primarily through commercial banks, credit unions, DFC and remittances from family members abroad. Despite these developments the demand for housing by the low and middle-income households still exceeds supply.

4 - 4 - The project will therefore support the policy of the GOBZ s on the provision of adequate housing for the Belizean population. By targeting the low and lower middle-income groups, the project will satisfy a demand for affordable credit that cannot be met elsewhere, promote home ownership and improve the existing housing stock GOBZ has recognised the importance of MSMEs to the economy, especially in terms of increasing diversity, innovation and entrepreneurship as well as providing employment opportunities. Access to affordable capital by MSMEs remains constrained by inadequate security, high administrative costs, and insufficient funds for on-lending by specialised micro-enterprise credit institutions. There is strong demand for funding by small scale entrepreneurs in Belize. Through this line of credit, DFC will make loans to approved Financial Institutions, including credit unions, for onlending to microenterprises. An area of growing concern for Belize, is how best to address issues of energy security and the impact this has on its overall competitiveness. GOBZ s specific strategy for the energy sector is defined in its Belize National Sustainable Energy Strategy which is part of the Strategic Plan for the Ministry of Energy, Science and Technology and Public Utilities. This policy is very much aligned with CDB s Energy Policy which articulates a vision for the transformation of the energy sector to significantly increase energy security and sustainability, enabling economic growth. In this regard, Sustainable Energy options, which include renewable energy and energy efficiency, provide real opportunities for CDB's Borrowing Member Countries (BMCs). CDB seeks to

5 - 5 - support its BMCs in this transformation by assisting them to develop their abundant indigenous renewable energy resources and the energy sector as a dynamic economic sub-sector, advancing the development of a green economy, and supporting climate resilience. With RE contributing to 56% of the electricity supply mix, Belize is ahead of many of CDB s BMCs in the realisation of its Sustainable Energy targets, however, there remains much opportunity for increasing the efficiency of energy utilisation. The EE/RE component of the Line of Credit being launched today, will promote energy cost savings for MSME operations, allowing them to improve viability. The Line of Credit provides TA, attractive interest rate and terms, and is one of the innovative instruments of the Bank under its new Energy Sector Policy and Strategy. The Technical Assistance will be provided through the Caribbean Technological Consultancy Services Network, which is a CDB-funded programme to assist small business development. CDB has found that the impact and performance of the interventions we have made in our various borrowing member countries have been impacted by: a lack of institutional capacity and capability in borrowing countries, lack of continuity in project staff and consequently loss of institutional memory throughout the various phases of the projects, and a deficiency in knowledge of the applicable procedures. This Project Launch Workshop is being used as a mechanism to mitigate these risks. Over the next two days we will be working with the Ministry of Finance, the Board of Directors, management,

6 - 6 - and staff of DFC and other key stakeholders to apprise them of the implementation and reporting requirements of the project; and the expected results and their contribution to them. We think that this shared knowledge promotes more efficient project implementation within the proposed timeframe. Thank you for inviting us to work with you, and we extend best wishes to the staff and management of DFC for a successful project that will achieve all of the results we hope for and that can be cited as a model for our continued work across the Region. BACKGROUND Consistent with our development mandate, CDB has supported the national development priorities of the Government and People of Belize with more than USD400mn in loan and grant funding over the past four decades. This funding has assisted with the upgrade of utilities, both water and electricity; road and transportation infrastructure with the most recent intervention aimed at improving road safety, and from all reports, the expected outcome of a reduction in the number of road accidents along the targeted corridor and more generally, in the country, is already being realised. CDB has also partnered with you in the area of citizen security through the Youth and Community Transformation Project targeted at the Southside communities in Belize City; and education at the central level of government and through our Basic Needs Trust Fund Programme. CDB is therefore pleased to continue to support the development priorities of Belize in general, and in the context of this project CDB commends you as you continue to support priority sectors such education and housing, and develop small and medium-sized enterprises while promoting energy efficiency (EE)/renewable energy (RE).