THE Inter-American Development Bank (IADB) accessed the rupiah bond market to raise 55 billion rupiah (US$3.5 million) in sustainable development bond (SDB) to fund projects focusing on the UN Sustainable Development Goals relating to good health and well-being.

Solely arranged by J.P. Morgan, the three-year deal, announced on April 13, has a coupon of 6.60%. The issuance follows IADB’s recent announcement that it would make up to US$12 billion available to countries requesting support for the Covid-19 pandemic and its consequences.

The bank says it will concentrate support in four main areas:

* The immediate public health response: Support for countries’ preparedness and response capacities to help contain the transmission of the virus and mitigate its impact, with resources to strengthen public healthcare systems, and purchase supplies and equipment.

* Safety nets for vulnerable population: Measures to protect the income of the most affected population through existing transfer programmes, non-contributory pensions and grants. Other proposed measures include extraordinary transfers to workers in the informal sector and support for companies in sectors particularly affected by the crisis, such as tourism.

* Economic productivity and employment: Assistance to SMEs, which account for 70% of the region’s jobs, through financing programmes and short-term liquidity guarantees, foreign trade financing and guarantees, loan restructuring and support for strategic supply chains.

* Fiscal policies for the amelioration of economic impacts: Support to countries in designing and implementing policies in three key areas – fiscal measures to finance the response to the crisis; continuity plans for the execution of expenditures and public procurement; and measures to support economic recovery.

The offering was IADB’s second SDB transaction following the break in US dollar supply after days of turbulence in financial markets caused by the Covid-19 outbreak.

IADB printed its inaugural SDB in September 2019 amounting to C$600 million (US$425.50 million), the proceeds of which will be directed to support sustainable development in the bank’s member-countries aligned with its strategic priorities to reduce poverty and inequalities in Latin America and the Caribbean by promoting economic and social development in a sustainable, climate-friendly way.