Inter-American Development Bank (IDB) President Ilan Goldfajn is working to secure approval for a US$ 2.5 billion loan to Venezuela and has faced pushback from part of the lender’s board, according to two sources with knowledge of the matter who spoke to Reuters.

Board members raised concern about lending to Caracas without the parallel work of other multilateral lenders that would ensure the country’s capacity to repay, even though they recognise the benefits of re-engaging with Venezuela, one of the sources said. The IDB has made no new loans to the country since May 2018, when Venezuela fell behind on payments, and Caracas owes more than US$ 2 billion in overdue principal and interest to the bank. The operation would fall under a Special Development Lending (SDL) arrangement, which for Venezuela is capped at US$ 500 million under the bank’s rules, and would require a size waiver and a second waiver for the absence of a standing programme with the International Monetary Fund (IMF). Any proposal needs the approval of the IDB’s 14-member executive board, where the United States holds 30% of the voting power, followed by Argentina and Brazil with 11.35% each. Goldfajn told Reuters on Monday, 21 September, that the IDB is working on an “engagement note” with Venezuela, a short-term plan that typically precedes new lending. The bank declined to comment, and the Venezuelan government did not respond to a request for comment.