31 January 2008
Maputo — The board of directors of the World Bank on Tuesday approved a loan of 60 million US dollars to implement the Fourth Poverty Reduction Support Credit (PRSC 4) for Mozambique, according to a World Bank press release received by AIM.
The money comes from the World Bank's soft loans affiliate, the International Development Association (IDA) on standard IDA terms. This means the loan is repayable over 40 years, with a ten year grace period. The loan carries no interest as such, but there is a minimum commitment charge of 0.5 per cent per year, and a service charge of 0.75 per cent a year.
The World Bank describes PRSC 4 as "part of a series of annual operations to support the Mozambican budget, with the objective of helping the Mozambican government implement key policies advocated in its second Action Plan for the Reduction of Absolute Poverty (PARPA II)".
The Bank's director for Mozambique, Michael Baxter, cited in the release, said "this important operation will help the government maintain macro-economic stability, while at the same time pursuing its reform agenda, which could not be fully financed based on domestic resources".
The head of the Bank's team for the entire series of PRSCs, Antonio Nacifora, said "The operation will support the government in implementing PARPA II, with a focus on reducing poverty by promoting broad based growth, particularly in the rural areas. It will also support key reforms in governance through the management of public finances and procurement".
The PRSCs are part of the Bank's country strategy for Mozambique approved last year for the 2008-2011 period. The loans are harmonised with the assistance given by the other 18 donors and funding agencies that support the Mozambican state budget.
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