NR-ES1e/01

PRESS INQUIRIES TO:  Peter Bate (503) 243-4444   Email: peterb@iadb.org

FOR IMMEDIATE RELEASE

January 22, 2001

SAN SALVADOR - The Inter-American Development Bank today announced it was preparing a financial aid package to support El Salvador’s emergency and reconstruction efforts after an earthquake hit the Central American nation nine days ago.

On Saturday, Jan. 13, a severe quake triggered landslides that killed more than 700 people in El Salvador and injured more than 4,000. Hundreds more have been reported missing. The disaster also caused serious damage to infrastructure and housing throughout the country. More than 100,000 families either lost or suffered major damage to their homes.

The IDB’s financial support for El Salvador will consist initially of resources from projects already underway in the country. Of those loans, some $150 million could eventually be steered towards reconstruction efforts.

The IDB is also preparing a $20 million special loan under its emergency reconstruction facility, which is used to assist member countries hit by natural disasters.

In El Salvador’s case, those emergency funds will be largely used to help meet the dire need for temporary housing for families who lost their homes. They will also support efforts to stabilize high-risk hillsides and embankments affected by the quake.

The Salvadoran government has also asked the IDB to organize a Consultative Group meeting that will bring together donor countries, multilateral organizations and aid agencies.

At that meeting, tentatively scheduled for early March, sources of financing will be identified and assistance will be requested for financing reconstruction plans.

The IDB began working on its response to the Salvadoran emergency right after the earthquake struck. Bank staff in San Salvador and in Regional Operations Department II in Washington immediately got in touch with Salvadoran officials to coordinate efforts, and it was decided to send a special Bank mission to El Salvador.

The Bank mission, which included housing, infrastructure, transportation, power, environment, education, institutional reform, finance and disaster prevention and mitigation specialists, started to arrive as soon as the Comalapa airport --which was slightly damaged by the quake-- reopened last week.

Over the past week, members of the IDB team inspected areas hit by the quake and began to assess likely financing needs. Working with Salvadoran officials, they reviewed the Bank’s portfolio of projects to identify resources that may be applied to reconstruction efforts. They also started to prepare the emergency loan.

Led by Miguel E. Martínez, manager of the IDB’s Regional Operations Department for Central America, Mexico, Panama, Belize, Haiti and the Dominican Republic, the team met with President Francisco Flores and numerous authorities of his government, as well as with some members of the Salvadoran Legislative Assembly. They also talked to representatives of the international community and nongovernmental organizations that are helping El Salvador.

The IDB welcomed the legislature’s recent votes to ratify three loans totaling $164 million that were granted for state modernization, education and health programs. Part of these resources may be used to support the repair and rehabilitation of roads, housing, schools and basic health care units.

The IDB mission also asked the lawmakers to consider the ratification of other pending projects, among them a $43.7 million loan for a water and sanitation program and a $30 million environmental cleanup project.

The Bank is also preparing new loans for El Salvador for housing and secondary roads programs and a project to foster the sustainable management of the Bajo Lempa river basin. These loans, which could be used in part to support reconstruction efforts and natural disaster mitigation and prevention, would total about $200 million.