QUITO (Reuters) – Ecuador’s government is seeking to activate credit lines with international lenders in an effort to mitigate expected El Nino weather disruptions, the country’s finance ministry announced on Thursday.
The funding plan is part of outgoing President Guillermo Lasso’s efforts to organize preventative measures to deal with the likely hit from the cyclical weather pattern.
The conservative leader has said an initial funding of $266 million will be covered by the general government budget as well as a local debt issuance. Officials have said the figure could rise depending on needs.
Finance Minister Pablo Arosemena will request early activation to the Andean country’s credit line with the Inter-American Development Bank, which totals roughly $400 million, the ministry said in a statement.
The government will use the funds to cover expenses that potential natural disasters stemming from El Nino could unleash on the country, but the ministry did not specify how much of its credit line with the lender it expects to tap.
Officials have said they might also seek out funding from other multilateral lenders, including the International Monetary Fund (IMF), as part of the preventative measures.
Late last year, the government finalized a $6.5 billion loan program with the IMF.
Lasso, a former banker who announced last month he will not compete in early elections scheduled for August, has emphasized that his government will implement the plan ahead of the expected El Nino impact, which is seen striking during the final three months of this year.
Lasso’s successor will need to see the measures through, however, after he dissolved the National Assembly in May while at the same time cutting his own tenure short, ahead of opposition attempts to remove him from office.
(Reporting by Alexandra Valencia; Editing by Sandra Maler)
