IDB approves US$19.7 million loan to Panama for technology transformation program

The Inter-American Development Bank today announced the approval of a US$19.7 million loan to Panama to support the first phase of a multiphase program for technological transformation.

The purpose of the program is to boost Panama’s capacity for research, development and innovation in economic sectors that are key to growth. Financing will be provided for three components to promote innovation, research and human capital capacity-building in science and technology, and the institutional capacity of the national innovation system to coordinate and implement science, technology and innovation policy.

The program activities will include support for technological innovation projects in businesses and universities, studies to identify problems that can be solved through research and development, and financing for R&D projects in businesses, universities and research centers.

To develop human capital for science and technology, the program will strengthen science education, create a system for early identification of talent in science from preschool to secondary school, support the national research system, provide grants for graduate study abroad and support graduate students in science and technology programs in public universities.

Through support for think tanks, excellence in public research institutes and organization for internal control and sector targeting, the program will help improve the national capacity to coordinate technology transformation.

“Panama has experienced strong economic growth since the early 1990s and is well positioned to continue on a path of sustained development,” said Project Team Leader Pedro Sáenz Arce. “Given the enormous weight of services in the Panamanian economy, which account for 78 percent of GDP, improving the quality of human resources is crucial to fulfilling this objective.”

Panama’s National Secretariat for Science and Technology Innovation (SENACYT) will be the program’s executing agency. SENACYT has implemented two previous IDB operations.

Once the first phase of the program is completed and its targets have been met, the second phase of the program will be triggered and the borrower will become eligible for an additional US$50 million in financing from the IDB. The second loan will be used to strengthen the program components, drawing on the lessons learned, and will include support for science and technology infrastructure.

The loan for the first phase, which will be drawn on the Single Currency Facility of the IDB’s Ordinary Capital, is for 25 years, with a seven-year grace period and a variable interest rate. The Panamanian government will invest US$9.3 million in the program’s first phase.