Buenos Aires, Argentina – The World Bank announced on Thursday that it is preparing to back up to US$2 billion worth of loans in order to help Argentina refinance its debt at a lower cost.

The loans – which Argentina is negotiating with private banks – would be repayable over six years, and would be almost fully backed by two World Bank institutions: the International Bank for Reconstruction and Development and the Multilateral Investment Guarantee Agency, Bloomberg reported.

Meanwhile, the IMF is gearing up to disburse another US$1 billion of the $20 billion it had made available to the country last year, as the White House rallies support for its ally, Argentine President Javier Milei. 

The guarantee will come as welcome news for Milei, who has seen his approval drop to a low of 36.4% in recent polls as monthly inflation soared to its highest rate in a year. 

The World Bank’s announcement followed a meeting between Argentina’s Economy Minister Luis Caputo and World Bank President Ajay Banga. 

Caputo posted a photo with Banga on social media after the announcement, captioned “Thank you Ajay and team!”

The minister is currently in Washington for IMF meetings, as he looks for funding in order to refinance Argentina’s debt. He told investors earlier this week that Milei’s government will not need to access global capital markets this year due to cheaper financing options.

Argentina is reportedly negotiating an interest rate of about 5%, which would be a far better outcome than the 9% bond yields that it faces if it returns to global capital markets. 

A separate agreement was reached with the IMF on Wednesday, which will see Argentina gain access to US$1 billion if approved by the organization’s executive board. 

The country already has an ongoing US$20 billion IMF program and access to an additional US$20 billion through a swap line with the U.S. Treasury.

In the World Bank Group’s announcement released on Thursday, it also “reaffirmed its strong support for Argentina’s reform efforts to strengthen the conditions for growth, investment, and job creation, including measures to improve financing conditions and reinforce market and investor confidence.”