Ecuador will begin a round of investments in potable water, sanitation, and solid waste management with the support of a $120 million loan approved by the Inter-American Development Bank (IDB).

Through these investments, it aims to improve beneficiaries’ quality of life by expanding access to and enhancing these essential basic services with a focus on social inclusion, gender and climate change. 

The loan, which was approved by the IDB's Board of Executive Directors, seeks to expand coverage and improve the quality of potable water and sanitation services, improve the integrated management of urban solid waste, and strengthen the capacities of utilities and Banco de Desarrollo del Ecuador B.P. to manage these projects.

In 2021, Ecuador’s potable water service coverage was 78.8% (74.35% in rural areas).  Its sanitation coverage was 59.6% (65.44% in rural areas). Its urban solid waste collection and transportation services handle 80.9% of the waste generated. On the other hand, 51.6% of the Decentralized Autonomous Governments ultimately dispose of waste in sanitary landfills, 29.9% in emergent cells [????] and 18.5% in dumps.

To improve these indicators, the program will support the preparation, adjustment or completion of pre-investment studies for drinking water, sanitation, urban solid waste and storm drainage projects. It will also support their supervision and socio-environmental studies, including aspects related to climate change, gender and diversity.

Additionally, the operation will finance the construction, expansion, rehabilitation and/or completion of municipal infrastructure for potable water, sanitation, urban solid waste and storm drainage, such as treatment plants, distribution networks and household connections for potable water systems; sewage and storm water collection networks, household connections and treatment plants; and integrated solid waste management systems or any of their phases.

It will also support plans for improving utilities' management and the design and implementation of technological modernization and organizational development plans for Banco de Desarrollo del Ecuador B.P.

The program will directly benefit 312,000 people (approximately 91,000 households) with new or improved drinking water and sanitation connections and/or urban solid waste collection and disposal services. This population has higher poverty rates than the national average, with places where most of the poor are Indigenous and 17.6% of households are headed by women. The utilities will also benefit from enhanced service management and the Banco de Desarrollo del Ecuador B.P. will benefit from institutional strengthening. 

The $120 million IDB loan has a 23.5-year repayment period, a 7-year grace period, an interest rate based on the Secured Overnight Financing Rate (SOFR), and a $5 million local contribution.