By Rodrigo Campos and Cassandra Garrison
NEW YORK/MEXICO CITY, Sept 22 (Reuters) – The head of the Inter-American Development Bank is working to secure approval for a $2.5 billion loan for Venezuela but has faced pushback from some members of the lender’s board, two sources with knowledge of the matter told Reuters.
IDB President Ilan Goldfajn has faced concern from the board about lending to Caracas without moves by other multilateral lenders that would ensure Venezuela’s capacity to repay, although the board recognizes the benefits of re-engaging with Venezuela, one of the sources said.
The IDB declined to comment and the Venezuelan government did not respond to a request for comment.
The IDB stopped making new loans to the South American country in May 2018, after it fell behind on payments.
Renewed lending would require special approvals, which are not uncommon when countries return to borrowing from multilateral institutions, but the source said some on the board are apprehensive about the rapid pace of the process.
The oil exporter has in recent years faced a liquidity and macroeconomic crisis due in large part to much lower oil revenue and a widening fiscal deficit. Analysts expect the restructuring of its debt, which they estimate could exceed $200 billion, to be a slow and convoluted process.
Any proposal to lend to Venezuela would ultimately require approval from the IDB’s 14-member Executive Board, where the United States wields 30% of the voting power, followed by Argentina and Brazil with 11.35% each.
A $2.5 billion IDB operation, while dwarfed by Venezuela’s substantial overall debt, would mark a milestone in early-stage recovery financing.
The IDB currently cannot issue loans to Venezuela under its public arrears policy, given that Caracas has more than $2 billion in overdue principal and interest with the regional lender. The arrears, however, could be cleared with a third-party bridge loan, a standard process in reintegrating a country into the international financial system, one of the sources said.
The proposed IDB loan would fall under a Special Development Lending arrangement, according to the two sources, which in the case of Venezuela would be capped at $500 million as per IDB rules. A $2.5 billion loan to Caracas would require a size waiver, and a second waiver on the lack of a standing program with the International Monetary Fund — an SDL requirement, according to the bank’s rules.
Goldfajn told Reuters on Monday that the IDB is working on an “engagement note” with Venezuela, a short-term plan that typically precedes new lending.
The IDB has 48 member countries, including 26 borrowing members in Latin America and the Caribbean, where it is the largest source of multilateral financing. In 2025, it approved $17.4 billion in new loans and guarantees, while its outstanding loan portfolio reached nearly $118 billion, according to its latest annual report.
(Reporting by Rodrigo Campos in New York and Cassandra Garrison in Mexico City; additional reporting by Vivian Sequera in Caracas; editing by Karin Strohecker, Megan Davies and Edmund Klamann)
Comments