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Colombia’s Pasto Municipality to expand water and sanitation services with $27.8 million IDB loan

The Municipality of Pasto in Colombia will ensure its urban and rural residents have access to high-quality, efficient, and sustainable water and sewer services with help from a $27.8 million loan approved by the Inter-American Development Bank today.

The program is expected to expand service coverage to 30,000 users. Around 21,000 of these new service users will be in the city of Pasto, home to around 80 percent of the municipality’s 395,000 residents. The remainder will be in low-income rural communities that surround the city. 

A key focus of the program is to strengthen the business capacity of EMPOPASTO (the urban water and sewage service provider) along with the water cooperatives that manage these services in rural areas. EMPOPASTO will use the resources to improve indicators in areas such as energy use, water losses and customer service. The rural cooperatives will receive investments and training to help them improve the quality of water supplies and the long-term financial sustainability of the service.

The IDB funds will also finance the construction of new sewage collection networks that will prevent the discharge of wastewater into rivers and lakes within the city of Pasto. This will contribute to a cleanup of the Pasto River, reducing health risks and improving environmental conditions in densely populated areas, while diminishing the risk of flooding in several parts of the city.

This program contributes to meeting the goals set out in the IDB’s Water and Sanitation Initiative, which aims to finance projects in 100 medium-sized cities and 3,000 rural communities by 2011. In addition to funding physical infrastructure, this initiative is focused on improving the management capacity, transparency and sustainability of service providers.

The IDB loan is for 25 years with a 6-year grace period and an interest rate based on LIBOR. The Government of Colombia will provide $16.2 million in counterpart funding, for a total program budget of $44 million.

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