December 9, 2010 No. 55/10-BD CDB APPROVES REVISION IN SCOPE OF ANTIGUA AND BARBUDA POLICY-BASED LOAN The Caribbean Development Bank (CDB) has approved a revision in scope of the policy-based loan (PBL) which it approved for the Government of Antigua and Barbuda last year. In December 2009, CDB approved a PBL equivalent to USD30 million to Antigua and Barbuda in support of reforms aimed at restoring fiscal and debt sustainability, as part of a broader assistance strategy for that country. The PBL was also an integral component of a financing to assist the government in implementing its National Economic and Social Transformation Plan. Under the terms and conditions of the loan, subject to the government entering a stand-by arrangement with the International Monetary Fund (IMF), three equal tranches were to be disbursed on satisfaction of condition precedent to each disbursement. The policy matrix agreed to by CDB and the Antigua and Barbuda government identified the policy actions or conditions to be met before disbursement of each tranche, the timeline for completion of such action, and the means of verification that such actions have been undertaken. IMF approval for the stand-by arrangement came in June 2010, significantly later than originally anticipated. Disbursement of the first tranche of the CDB PBL was made to Antigua and Barbuda on September 10, 2010. CDB has now agreed to align the conditions precedent to the disbursement of the second and third tranches of its PBL to quantitative performance criteria and indicative targets of the IMF's stand-by arrangement, in keeping with the Bank's commitment to harmonise its operations with other development partners. This change in policy conditions will also provide the government with greater flexibility in achieving the fiscal targets in the context of an uncertain and challenging economic environment.