News item | 13-12-2023 | 10:47
Through the Global Concessional Financing Facility, the Netherlands supports middle-income countries that host many refugees, but are not eligible for soft loans from development banks. Such as Armenia, which has been hosting more than 100,000 residents from the Nagoro-Karabakh enclave since September.
On September 19, Azerbaijan invaded the ethnic Armenian enclave of Nagoro-Karabakh. The attacks forced approximately 100,000 people to leave their homes. Almost all residents of the enclave found safety in Armenia. The refugees received make up approximately 3% of the Armenian population.
This sudden increase in population numbers puts heavy pressure on social services, the labor market and the economy in the country. The reception of refugees also entails high costs. To support Armenia in this, the Netherlands is contributing 10 million to the Global Concessional Financing Facility.
Low interest and longer repayments
The Global Concessional Financing Facility was established in 2016 to support countries that host many refugees. The fund gives middle-income countries the opportunity to borrow money from development banks, such as the World Bank and the European Bank for Reconstruction and Development (EBRD), on favorable terms. For example, at a lower interest rate and with a longer repayment period. Typically, middle-income countries are not eligible for these types of soft loans from development banks, as they are often only intended for the poorest countries.
The Global Concessional Financing Facility is implemented by the World Bank and uses contributions from donor countries such as the Netherlands, Canada and Denmark. These contributions make it possible for countries to borrow a larger amount for development projects.
Want to know more about the work of the World Bank? Also read the article: ’75 years of the Netherlands and the World Bank’
Education, healthcare and shelter
Since its inception, the fund has provided loans to development projects in Colombia, Costa Rica, Ecuador, Jordan, Lebanon, Moldova and soon to Armenia. With this money, Armenia wants to strengthen local health care and education and provide people with safe shelter.
Shelter in the region
The Netherlands is a major donor to the Global Concessional Financing Facility and since this week is also co-chairman of the fund. The Netherlands believes it is important that people who are fleeing are received safely and humanely in the region. Instead of long-term shelter in refugee camps, they are given the opportunity to build their own lives until they can return. Refugees also feel less compelled to travel further, for example to Europe.