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Bolivia to receive $100 million from Spain and IDB to improve water and sanitation services

The Inter-American Development Bank and the Government of Spain will provide a total of $100 million in grants and loans to Bolivia in the first stage of an unprecedented partnership to tackle water and sanitation problems afflicting Latin America’s poorest communities.  

This is one of the first projects jointly funded by the IDB and Spanish Cooperation Fund for Water and Sanitation in Latin America and the Caribbean (the Spanish Fund), an initiative announced last year by Spanish Prime Minister José Luis Rodríguez Zapatero.

The IDB and the Government of Spain signed an agreement in July 2009 to jointly finance and execute projects with a portion of the Spanish Fund’s grants. The partnership will take advantage of the IDB’s extensive portfolio of water and sanitation projects, as well as its network of sector specialists in country offices throughout the region, to rapidly and efficiently execute projects identified as priorities by Latin American and Caribbean governments.  

In Bolivia, the Spanish Fund will contribute $80 million in grants and the IDB another $20 million in ordinary and concessional loans to extend water and sanitation services to some 500,000 people in periurban areas of El Alto, La Paz, Cochabamba, Santa Cruz, and Tarija who are currently without service.

The IDB and Spain have also agreed to provide $39 million in grants for water and sanitation projects in Haiti (see link at right), and are expected to jointly finance projects in Brasil, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Paraguay, Peru, the Dominican Republic and Uruguay between now and mid-2010. In all, Spain will contribute $407 in grants to these projects, while the IDB will contribute $213 million in grants and loans, while also assuming the bulk of the project preparation and execution costs. Around 4 million people in low-income urban and rural communities are expected to benefit directly from these projects.

“This partnership is a historic gesture of solidarity by the people of Spain toward our region,” said IDB President Luis Alberto Moreno. “These generous grants will enable us to leverage IDB funds and finance much more ambitious projects that will improve the health and quality of life of millions of people in some of the Hemisphere’s poorest communities.”  

The Bolivian government is implementing a comprehensive plan to expand water and sanitation services in peri-urban areas as part of a National Basic Sanitation Plan published by its Water Ministry last year. The Plan recognizes water service access as a universal right, rejects concessions and privatization, and makes the State responsible for service provision. It also stipulates that services must fulfill criteria of universality, responsibility, accessibility, continuity, quality, efficiency, and fair and necessary charges. Finally, the Plan recognizes cultural and ancestral uses of water and requires the State and the population to conserve, protect, and use water resources sustainably.

Service expansion in urban and peri-urban areas is one of the Plan’s near-term priorities The Bolivian Government estimates that investments of around $700 million are needed in urban areas to achieve the Millennium Development Goals by 2015. Meeting these goals will require increasing access to water supply and sanitation for 1.4 million and 1.7 million inhabitants, respectively.

The $100 million from the Spanish Fund and the IDB are intended to help Bolivia meet these investment goals. The funds will be used for four principal activities: construction of new infrastructure in unserved areas; completion of water and sanitation master plans for La Paz, El Alto, Santa Cruz, Cochabamba and Tarija; institutional strengthening for relevant service operators and government authorities; and establishment of a full-time program coordination unit to audit, evaluate and monitor project execution.

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