The World Bank Group has approved a $2 billion commercial loan package for Argentina, which will help the country reduce its financing costs and strengthen public debt management, the institution said in a statement.

Loan Details

The loan package combines a policy-based guarantee from the International Bank for Reconstruction and Development with a guarantee from the Multilateral Investment Guarantee Agency, the bank said in a statement. The commercial loan has a six-year term, with a three-year grace period.

The loan package is due to support reforms to mobilize private capital for infrastructure, strengthen market competition and improve the business climate for companies. The guarantees will cover 95% of debt service payments on the commercial loan, allowing Argentina to reduce financing costs and strengthen public debt management.

Susana Cordeiro Guerra, the World Bank’s vice president for Latin America and the Caribbean, said in a statement, “We are committed to supporting Argentina’s macroeconomic stabilization and its growth-oriented reform agenda.”

Argentina has some $4.4 billion in repayments due by July 9. The World Bank said in April that it was working to provide the South American country with a $2 billion plan to refinance its debt.

The Development Bank of Latin America and the Caribbean (CAF) on Tuesday also announced that it will provide a $400 million loan to Argentina’s Pan American Energy to finance the company’s natural gas operations and expand production.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.