The government will use World Bank loans for approx 1,000 million dollars modify the subsidy regime for energy and transport. The aim is too restructure the subsidy regime for electricity and public bus transport and target national state aid exclusively to the most vulnerable users through a social tariff.The current segmentation scheme for energy tariffs (electricity and gas) throughout the national territory will thus be eliminated.
Another objective is to reduce subsidies to groups - resources are allocated only in the metropolitan area of Buenos Aires (AMBA) -,although this has a greater impact on society and inflation.
The terms of the contracts state that Argentina will commit to developing “institutional capacities” and directing state resources with a “gender viewpoint,” as well as preventing and responding to “sexual harassment” in transportation and mitigating “climate change.”
The World Bank has already approved these loans, but their disbursements will only begin next year.
Him Project to support the sustainability and equity of public transport will grant $500 million and establish criteria for “eligibility” of users to receive subsidies through a social tariff program, which must link the individual data that different state agencies have on people with the records of the Single Electronic Ticket System (UP) .
Some of its objectives are to “strengthen inclusion” of people with disabilities,“support prevention and response to sexual harassment” in public transport and “support climate change mitigation and adaptation”,through the identification of electric vehicles and the transition towards models with low emissions of greenhouse gases into the atmosphere,such as carbon dioxide (CO2).
This program foresees that in the coming years approximately 400,000 beneficiaries will have to be added to the social tariff and that approximately 1,360 million trips will have to be subsidized. The loan principal will be repaid in semiannual installments between December 1, 2031 and June 1, 2056, at a rate of $20 million per year.
Meanwhile, the Project to support the transition towards a sustainable electricity sectorfor another $500 million, sets among its goals “to protect low-income families from further rate increases, with the inclusion of a gender perspective when feasible.”
The official intention is rationalize spending on subsidieswhich have already decreased by 34% this year compared to the period January-October 2023, while in 2025 they would decrease again between 30% and 40% to represent less than 1% of the Gross Domestic Product (GDP), to move closer to the dollar USA. 4,000 million.
MM with details from the NA agency.