IDB Drafting Two-Year Venezuela Plan Focused on Electricity and Social Needs

The Inter-American Development Bank (IDB) is drafting a two-year plan to re-engage with Venezuela, with a strategic focus on the country's critical electricity and social protection sectors. The move signals a potential thawing of relations between the major regional lender and the long-isolated South American nation.

IDB President Ilan Goldfajn confirmed the initiative in an interview with Reuters on Monday. "We are, of course, reengaging," he said, explaining that the bank is actively sending missions to the country to assess current conditions.

A Cautious Re-engagement

The plan is being developed as an "engagement note" outlining the IDB's intended activities over the next two years. According to Goldfajn, these missions are tasked with evaluating Venezuela's macroeconomic framework, analyzing available data, and identifying key sectoral requirements.

"We are still in the moment of planning and working with Venezuelans, engaging and going to the missions, and seeing how we can work with them," Goldfajn stated. The bank is concentrating on these foundational steps rather than conducting its own debt-sustainability analysis at this stage.

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Background on Arrears

The IDB, the largest development lender for Latin America and the Caribbean, halted new loans to Venezuela in May 2018 after the country fell into arrears on its payments. Venezuela still has approximately $2 billion in outstanding loans with the institution.

Goldfajn did not provide a timeline for when new financing could resume or specify how Venezuela's existing arrears would be addressed. The current focus remains on assessment and planning for a potential future relationship.