The Guarantee Contract formalizes the Government’s commitment to support a US$15 million loan granted by CAF to the Province of Misiones for an environmental preservation program.
The Decree 753/2024 approved two essential contracts for the financing and execution of the “Support Program for the Improvement of Management and Preservation of the Misiones Forest.” Essentially, this program aims to protect and improve the management of native forests and protected natural areas in the province of Misiones, a region of great biodiversity in Argentina.
The contract is signed in relation to a loan granted by the Andean Development Corporation (CAF) to the Province of Misiones for an amount of US$5 million. The objective of the loan is to finance a program to improve the management and preservation of the Misiones Forest.
He Guarantee Contract establishes that the Argentine Republic (the Guarantor) will provide a joint, unconditional and irrevocable guarantee to CAF. This means that, if the Province of Misiones does not comply with its obligations under the loan agreement, the Argentine Republic undertakes to assume that responsibility under the terms defined in the agreement.
What are the main points of the Decree?
- International Financing: The Andean Development Corporation (CAF), a development finance institution, will provide a loan to the government of the province of Misiones to finance the conservation program.
- National Guarantee: Since this is an international loan, the Government undertakes to guarantee payment of the debt in the event that the province is unable to meet its obligationsThis guarantee seeks to ensure that the loan is granted and that the project is carried out.
- Provincial Counter-Guarantee: The province of Misiones, in turn, agrees to pay the debt to the national government if it had to take it overThis additional measure seeks to ensure that the province is responsible for the use of funds and that the project is executed efficiently.
- Collection Mechanism: In the event of non-compliance by the province, the national government may deduct the amount owed from the funds that the province receives from the federal government, through federal tax sharing.
- Approval of Contracts: The decree approves the models for guarantee and counter-guarantee contracts, which will be signed by representatives of the national and provincial governments, as well as by the CAF.
What is the significance of this decree?
This decree is an example of cooperation between different levels of government and international organizations to address a highly relevant environmental problem. By ensuring the financing and implementation of the program, it seeks to:
- Preserve biodiversity: The Misiones Rainforest is one of the richest ecosystems in Argentina, and its conservation is crucial to protect numerous species of flora and fauna.
- Promote sustainable development: Nature-based tourism can generate income for the region without compromising the environment.
- Strengthening environmental management: The program seeks to improve the capacities of provincial institutions to manage natural resources sustainably.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
