The International Monetary Fund's executive board approved a $932 million loan program Monday for Jamaica aimed at helping the government begin cutting its borrowings and spark economic growth.
The loan is part of a $2 billion package from the IMF, the World Bank and the Inter-American Development Bank that aims to support a sweeping restructuring program for the impoverished Caribbean island nation.
For its part, the IMF was immediately releasing an initial disbursement of $207 million from the four-year loan.
"The main objective of the program is to put public debt on a firmly downward trajectory and thereby create a virtuous cycle of debt sustainability and higher economic growth," IMF First Deputy Managing Director David Lipton said in a statement.
"For most of the past three decades, Jamaica has suffered from very low growth, high public debt, and serious social challenges. Key factors behind these problems have been Jamaica's unsustainable debt burden, low competitiveness, a weak business climate and lack of policy credibility."
The package was sealed after the government undertook initial reform steps, including a domestic debt swap, to improve its finances and demonstrate its commitment to the program.
Lipton said the reform agenda includes "ambitious" fiscal consolidation and reforms to encourage investment and other inputs to growth.
He said the authorities are, importantly, also establishing a fund to aid financial institutions possibly in need of support after participating in the debt exchange.