Thanks to US$ 50 million in grants from Spain and US$ 50 million in loans from the Inter-American Development (IDB) Guatemala will expand safe water and sanitation services to approximately 600,000 people in 280 rural communities and 60 urban and periurban areas that today lack those services.
In addition to enhancing and expanding water and sanitation services, the program will foster organized participation by the rural communities and the municipalities in order to ensure that the systems constructed are sustainable over time. The funds will also serve to consolidate and strengthen the institutions needed for the planning, regulation and delivery of the services.
The program will lend support to a comprehensive plan drawn up by the Government of Guatemala to reduce the shortfall in coverage of these services. Current water and sanitation service coverage, nationwide, is 75 percent and 47 percent, respectively, which means that nearly 3 million Guatemalans still lack public water services and approximately 6 million lack sanitation services.
In the rural areas of Guatemala, water coverage is 60 percent, sanitation 36 percent. The worst shortfalls are found in areas with predominantly indigenous populations. According to Government estimates, only 15 percent of the water distributed in the country can be considered potable and barely 5 percent of the sewerage systems properly treat wastewater prior to disposal. To achieve United Nations Millennium Development Goals, Guatemala would have to invest an estimated $1,602 million in improving these services.
This is the fourth project financed jointly by the IDB and the Spanish Cooperation Fund for Water and Sanitation in Latin America and the Caribbean (the Spanish Fund), an entity established in 2009 at the initiative of the President of Spain, José Luis Rodríguez Zapatero.
Apart from the project in Guatemala, the IDB and Spain are co-financing projects in Haiti, Bolivia and Paraguay, and between now and mid-2010 they are expected to finance projects located in Brazil, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Honduras, Peru and Uruguay. All in all, Spain will donate US$ 407 million to those projects, while the IDB will contribute US$ 213 million in grants and loans, in addition to defraying the bulk of the their preparation and implementation costs. Some 4 million people living in low-income urban and rural communities are expected to benefit directly from these projects.
Initially, the program will be executed by the National Peace Fund (FONAPAZ) with the support of the Ministry of Public Health and Social Assistance. Nineteen months into the Program, responsibility for executing it will pass to the Municipal Development Institute (INFOM/UNEPAR).
Of the loans granted to the program by the IDB, US$ 40 million will be for a 30-year term, with a 5.5 year grace period, at a variable interest rate based on Libor, while the remaining US$ 10 million will be for a 40-year term with a grace period of 40 years, and an interest rate of 0.25 percent. The IDB could eventually consider financing a second phase of the program with an additional US$ 100 million loan.
Project information: IDB – Water and Sanitation Program for Human Development-Phase I
Related web sites:
- IDB – Spanish Cooperation Fund for Water and Sanitation in Latin America and the Caribbean
- IDB – Water & Sanitation
- Camilo Garzón, IDB Project Team Leader, USA, tel: (202) 623-1945, e-mail: camilog [at] iadb.org
- Edgar Orellana, IDB Project Team Leader, Country Office in Guatemala, e-mail: edgaro [at] iadb.org
Source: IDB, 23 Nov 2009
See below an IDB video on the Spanish Water and Sanitation Cooperation Fund