IMF approves $1.9 billion loan for Bolivia to support economy — OilPrice

On October 2, the Executive Board of the International Monetary Fund approved a $1.9 billion loan for Bolivia. The funds are intended to help the country, which is suffering from fuel shortages, declining gas revenues, and rising costs of imported fuel.

As OilPrice reports, the financing is conditional on cutting fuel subsidies and significantly reducing government spending. Bolivia’s Congress approved the loan in September. The program is also expected to give the country access to up to another $4 billion in financing from the World Bank and other lenders.

Declining gas reserves and exports

In April, Bolivia’s proven natural gas reserves were estimated at 3.7 trillion cubic feet. Over the past decade, gas exports have declined by nearly 60% due to falling production. At the same time, natural gas accounts for about 70% of electricity generation in the country.

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According to the publication, years of insufficient investment in the gas sector, a lack of successful new field discoveries, and weak renewable energy development have exacerbated the fuel crisis. Experts cited by OilPrice warn that by around 2030, Bolivia may become a net importer of natural gas.

Reforms and fuel shortages

The government has already raised fuel prices, and further gasoline subsidies are expected to be abolished from the beginning of next year. Cuts in support triggered protests last year, while in June and July protesters blocked roads for several weeks.

To ease diesel fuel shortages and rising prices, the authorities announced in September their intention to triple funding for petroleum product purchases. In July, Energy Minister Marcelo Blanco said the private sector had been allowed to import and sell petroleum products. The state hydrocarbon company is also to focus on exploration, production, and processing.