El Salvador Congress approves $250 million IDB loan

(C) Reuters.

SAN SALVADOR (Reuters) – El Salvador’s Congress on Sunday approved a $250 million loan from the Inter-American Development Bank (IDB) aimed at tackling the coronavirus pandemic a day after the financing appeared to be in jeopardy due to political squabbling.

The government and Congress failed to resolve differences over where the money would be spent by the time a deadline to approve the loan expired on Friday night, raising doubts about whether the Central American country would receive it.

However, Finance Minister Alejandro Zelaya and Mario Ponce, the head of Congress, asked the IDB for an extension in order to be able to ratify the loan in a special session on Sunday.

This time a deal was reached, and Congress authorized the loan with the backing of 59 out of 84 lawmakers in the chamber.

According to the government, the IDB offered El Salvador the loan at an interest rate of 2.1% with a 5-1/2 year grace period, giving the country until the end of July to approve it.