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The World Bank Board of Directors has approved a US$150 million Development Policy Loan (DPL) to the Government of Botswana recently. The loan is aimed at supporting reforms to stimulate inclusive, resilient, and low-carbon growth.
The World Bank Board of Directors has approved a US$150 million Development Policy Loan (DPL) to the Government of Botswana recently. The loan is aimed at supporting reforms to stimulate inclusive, resilient, and low-carbon growth.
The US $150 million Economic Resilience and Green Recovery DPL II is the second in a series of two operations. Under the first plan, there was a disbursement of US$250 million. The second tranche will be used for strengthening social protection, improving access to finance by small businesses, and prioritizing energy access and a move toward a low-carbon recovery. According to World Bank officials, this second tranche of aid will provide important fiscal space and technical support to the Government of Botswana’s policy efforts under the Economic Recovery and Transformation Plan.
For the last three decades, Botswana experienced sound macroeconomic policies and structural reforms riding on the back of diamond and mineral wealth lifting the country to upper-middle-income economic status since 2004. However, Covid-19 and subsequent global shocks had exposed the fragilities of Botswana’s growth model. The Southern African country is also highly vulnerable to climate shocks. Therefore, the country is also laying a lot of importance on low carbon growth.
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According to the World Bank, under Pillar 2, financial sector regulatory reforms will increase confidence in the credit information ecosystem, help formalize micro, small and medium-sized enterprises, and enable access to credit, supporting private sector development.
