US$13 MILLION REGIONAL INFRASTRUCTURE FUND MANAGED BY IDB

Kingston, March 29- The Caribbean is expected to benefit from a US$13 million regional infrastructure integration fund supporting cross-border projects designed to reduce transport and logistics costs to expand trade.

The Inter American Development Bank (IDB) will manage the fund that has received contributions from Canada, Mexico and the United States governments.

The IDB said that a recent study estimated that Latin America and the Caribbean is at 50 per cent of its intra-regional trade potential due to insufficient regional infrastructure and a still imperfect trade and regulatory architecture.

The study suggested that countries should prioritise integration projects to reduce trade costs, boost the region's export capacity and promote a better distribution of the benefits of deeper integration.

The contributions were announced on the margins of a meeting of finance ministers of the Americas during the annual meeting of the IDB's Board of Governors in Calgary, Canada.

The fund is expected to reach US$20 million, with additional contributions from other donors.

"Infrastructure investment is of utmost importance for the integration of Central America and the Caribbean," said Mexican Finance Secretary Ernesto Cordero.

"Also, a more integrated Latin America and Caribbean region will enhance the growth potential of the global economy”.

US President Barack Obama named the facility the "Crossroads Fund", recognising the strategic location of Central America and the Caribbean as a point of encounter of the Americas.

He announced his government's US$5-million contribution to the fund last week during a visit to El Salvador, where he underscored the need to increase trade and economic growth across the region.

Under the framework of the existing Fund for Integration Infrastructure -called FIRI- the IDB created a new multi-donor window to support its mandate on regional and global integration.

This window will allow the bank to leverage its traditional lending resources with innovative financing mechanisms to underpin high-impact cross-border infrastructure projects and efforts to harmonise regional trade-related regulatory frameworks.

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