This contract allows you to access financing to advance a project that will benefit rural communities.
Through the Official bulletinthe Government approved a model contract with the Andean Development Corporation (CAF) that allows it to access $50 million that will allow it to advance a program for access to water of the rural communities.
As established by the Decree 482/2023will be destined to finance the “Program of Safe Water for Dispersed Rural Communities”. The Ministry of Economy or the designated official or officials, to sign the CAF Loan contract and its additional documentation on behalf of Argentina. The contract model is an administrative step prior to disbursement that will be reflected in the Central Bank reserves.
At the same time, the decree indicates that Economy agree to appropriate modifications for the execution of that project as long as “they do not constitute substantial changes to the object and destination of the funds” nor do they result in a “increase in amount” or alteration in the agreed arbitration procedure.
Finally, it is clarified that: “the general conditions, repayment terms, Interest rates and other clauses contained in the Model CAF Loan Contract proposed to be signed are the usual ones agreed upon in this type of contract and are appropriate to the purposes and objectives for which the aforementioned will be destined. Loan“.
As detailed in the Annex, the Loan will have a term of fifteen (15) yearsincluding a Grace Period of sixty (60) Months, both counted from the Effective Date.
Loan with the CAF: what it will be used for
In clause 5 of the model contract, it is established that andThe US$50 million loan will be intended for:
- studies and works;
- purchase of goods, equipment and systems;
- contracting consulting, communication and dissemination activities, training and/or technical assistance;
- activities linked to supervision, inspection, inspections and/or
- administration of the works, as well as the management of environmental and
- social;
- external financial and environmental audit services;
- administration expenses;
- taxes attributable to expenses and investments to be financed by CAF;
- direct costs associated with evaluations of processes, results and/or impact of the Program; and
- the Financing Commission and Loan Evaluation Expenses.
CAF loan: how the loan will be made effective
In turn, it is clarified that “the Borrower, through the Executing agency, undertakes to justify the expenses incurred with charge to the Loan or the local counterpart in legal tender in the Country, expressing said expenses in Dollars and the following will be taken into account:
- Investments and eligible expenses with external financing: at the exchange rate applicable at the time of currency conversion from Dollars to Argentine Pesos.
- Investments and bills eligible for local contribution: at the exchange rate applicable to the payment date or day prior to payment.
- For the case of rinvestment reimbursement and expenses provided for in the Clause of these Specific Conditions titled “Reimbursement and Recognition of Investments and Expenses”, the provisions of literal b above will apply.
Source: Ambito
