IDB to lend US$115 million to improve digital connectivity

The Inter-American Development Bank (IDB) has approved a loan for US$115 million for improved access to digital services in areas less served by the telecom companies. When the government resorted to remote learning during the Covid-19 pandemic, thousands of children were left out because of the reduced connectivity in their communities. The initiative encompasses digital television services.

The project will finance investments to expand broadband infrastructure, including the expansion of backbone, aggregation and access networks to improve connectivity for the country’s citizens, says the IDB in a press release.

The operation will include private sector participation and support the deployment of infrastructure in areas that would not be economically profitable on their own, thus ensuring resource optimization. With this approach, both the public and the private sectors will contribute to reduce the digital gap and foster the sustainability of this type of infrastructure in the country.

In addition, the IDB project will endorse moves to improve broadcasting services, paving the way for transitioning from analog to digital television and enhancing digital abilities and competencies. One key aspect of the project is its promotion of policies that support digital dividend spectrum auctions in order to boost universal access.

It will also finance courses to train people to use equipment and technology with a gender perspective to help citizens develop their digital skills, step up access to digital services, and foster their adoption and continuity of use. These digital abilities will be crucial for the implementation and productive use of Information and Communication Technologies (ICTs), benefiting some four million low-income people, with a strong emphasis on women.

Enhanced connectivity will reach some 108 municipalities that either lack or have only one wired internet service network, benefiting more than two million people. An additional 56 municipalities that are home to 8.1 million people will get improved broadcast services, including the implementation of digital TV.

The IDB is financing the project with a US$115 million loan for a 25-year term, a 6.1-year grace period, and interest rate based on LIBOR. The project is expected to help raise annual GDP by 1.46 percent, boost productivity by 1.2 percent, and generate 33,000-plus jobs.

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30 July 2021