Uruguay struck an agreement for a $350 million sustainability-linked loan (SLL) from the World Bank, making it the first country to obtain such financing from a multilateral lender, Finance Minister Azucena Arbelenche told LatinFinance on Thursday.

The loan “is a concrete example of financial innovation and climate ambition working together and reinforcing each other,” she said in an interview on the sidelines of the annual meeting of the World Bank – International Monetary Fund in Marrakech, Morrocco.

The terms of the SLL, agreed on Monday, include a step down in interest payments if the government goes beyond its Paris Agreement commitment on lowering methane emissions from beef production. It could save up to $12.5 million in interest payments over the life of the loan, the Finance Ministry said in a press release.

“There is the possibility that this amount will increase with the contribution of resources from developed countries, in the event that Uruguay reaches the 2030 goal early,” the ministry said in a statement on Wednesday.

The World Bank’s board of directors is expected to approve the SLL next month, the ministry said.

JAMAICA TALKS

Meanwhile, the International Monetary Fund (IMF) said Jamaica is in talks with three financial institutions and the UK government on two financing deals for climate change mitigation projects.

The Jamaican government is working with the Inter-American Development Bank (IDB) on developing a project preparation facility to fund investments in the public and private sectors, the IMF said in a press release.

The Caribbean island is also working with the UN-backed Green Climate Fund and the European Investment Bank on funding for green projects such as renewable energy, electric vehicles and agriculture, the IMF said.

The second financing deal could have maturities of up to 30 years with a 10-year grace period and include “capacity-building and non-reimbursable grants at concessional rates,” the fund said.

“Once established, it will pave the way for Jamaica’s other bilateral and multilateral financing partners to support the facility,” the IMF said.

The UK government could provide £7 million in additional funding through the arrangement, the statement said.

The IMF granted $1.73 billion in financing for Jamaica in March, comprising a $968 million liquidity line and a $764 million loan to support its balance of payments.

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