October 9, 2002

IDB APPROVES $27 MILLION LOAN FOR LAND TITLING IN PANAMA

Project expected to promote land tenure security, access to credit and investments

The Inter-American Development Bank today announced the approval of a $27 million loan for Panama to support a land administration and regularization project in five Panamanian provinces.

The project, which will be carried out by Panama’s Economy and Finance Ministry*, seeks to promote land tenure security in order to facilitate access to credit and provide greater incentives for long-term investment in both rural and urban areas of the provinces of Herrera, Los Santos, Veraguas, Cocle and Colón.

“This project underscores the Panamanian government’s efforts to address one of the fundamental aspects of the rural poor’s access to land and capital to improve their livelihood,” said the IDB project team leader, Paul Trapido.

IDB resources will help expand and modernize Panama’s National Land Administration Program and strengthen the agencies responsible for land titling and administration at the national, provincial and municipal levels.

The project entails a massive land tenure regularization process in an area covering nearly 750,000 hectares. Regularization services include the legal cadastre, land titling, registry of properties and conflict resolution. Currently, there are some 69,000 titles existing in the target area. Under the project, around 120,000 new titles will be issued in benefit of an equal number of families.

Another component of the project will promote measures designed to improve access to information, services and complementary infrastructure that can boost the economic impact of land regularization, including greater access to credit by using land as collateral, increased investment in rural and urban properties and higher levels of productivity.

This project reflects the IDB’s strategy of supporting state modernization in order to strengthen governance and transparency and increase competitiveness, in this case by helping Panama improve land use and make its rural economy more dynamic.

The loan was granted for a 20-year term, with a five-year grace period and at a variable interest rate, currently at 5.39 percent a year. Local counterpart resources for the project will total $5 million.