The Inter-American Development Bank today announced the approval of a $13.9 million soft loan to Nicaragua to support a program to modernize the management of water and sewerage services.
The resources will support the consolidation of reform of the potable water and sanitation sector and the modernization of the Empresa Nicaragüense de Acueductos y Alcantarillados*, the Nicaraguan water and sanitation enterprise that will carry out the program.
The program will develop a gradual strategy to promote greater participation by the private sector. This will begin with the award of a service and management contract to a qualified international operator, which will be in charge of carrying out a modernization plan for the Empresa Nicaragüense de Acueductos y Alcantarillados at the national level as well as in the management of services in part of the western region of the country.
The project includes a pilot component that will help solve problems in providing potable water and sewerage services in poor areas of Managua.
The loan from the Fund for Special Operations is for a 40-year term, with a 10-year grace period, at an annual interest rate of 1 percent during the grace period and 2 percent thereafter.
The total cost of the project is $21 million. In addition to financing from the IDB, the project is backed by resources of the Organization of Petroleum Exporting Countries.
Local counterpart funds total 2.1 million.