News Releases

Dec 20, 2006

IDB supports program to alleviate urban poverty in Costa Rica

A $50 million loan to improve access to infrastructure, social services and land tenure in marginal neighborhoods

The Inter-American Development Bank today announced the approval of a $50 million loan to Costa Rica for an urban poverty alleviation program combining investments in basic infrastructure, social services and land tenure regularization in some 31 marginal neighborhoods.

The investments are expected to benefit some 9.000 poor families by expanding their access to better quality social services and infrastructure improvements in their communities, which in turn will raise the value of their property and integrate the settlements into the formal city.

The state-owned mortgage bank Banco Nacional Hipotecario de la Vivienda and Fundacion Costa Rica-Canada will carry out the program. The foundation is one of the organizations with most experience in handling housing subsidies for poor families lacking access to credit.

The program reflects lessons learned in more than 20 years of IDB involvement in comprehensive urban upgrade programs. From those experiences the Bank has concluded that there are critical aspects for these programs to succeed, such as the need to adopt a participative approach based on community decisions at every stage of the projects.

The program will also strengthen the participating agencies, ranging from the Housing Ministry and Banco Nacional Hipotecario to the municipalities where projects will be carried out.

The loan is for 25 years, with a 5.5-year grace period and a variable interest rate. Costa Rica will provide $8,409,00 to finance the program. Swedish technical cooperation resources were used to prepare the program.

 

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