IMF approves $364 million post-quake Ecuador loan

The International Monetary Fund (IMF) logo is seen at the IMF headquarters building during the 2013 Spring Meeting of the International Monetary Fund and World Bank in Washington, April 18, 2013. REUTERS/Yuri Gripas

QUITO (Reuters) - The International Monetary Fund (IMF) has approved a loan of about $364 million for Ecuador following a devastating earthquake in April that left almost 700 dead, thousands homeless and caused significant damage to infrastructure.

The government of Ecuadorean President Rafael Correa, who has historically been a harsh critic of multilateral lending agencies, had said in April that it was in talks with the IMF.

“The financial support will help the country meet an urgent need for balance of payments caused by the earthquake of April 16,” said Luca Ricci, head of the IMF mission to Ecuador, in a conference call on Friday.

The loan, which was granted through a program known as the rapid financing instrument, will have a variable interest rate of 1.1 percent per annum and a term up to 5 years with a grace period of 39 months.

Ricci said local authorities had committed “to reprogram priorities for capital expenditures and suspend low priority projects not related to reconstruction” if necessary.

Ecuador has said it will need some $3.3 billion dollars for reconstruction, which it plans to finance through a combination of funding sources including the IMF loan and a temporary tax increase.

Reporting by Alexandra Valencia, writing by Brian Ellsworth; Editing by Gareth Jones