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IDB approves $14,5 million to help modernize procurement systems in Honduras

The Inter-American Development Bank today approved a $14,580,000 soft loan to Honduras to promote efficiency and transparency in public sector procurement on a sustainable basis through modernization and strengthening of state entities.

The project will improve government procedures and tighten management, and it will make more effective the Master Plan for Reconstruction and Transformation, the nation's response to the devastation of Hurricane Mitch.

The internal control system for investment projects carried out by the executive branch and government agencies will be strengthened, and comprehensive support will be provided for procurement management by seven government agencies so that government projects and programs, as well as the Master Plan, can be properly carried out on a timely basis.

In addition, a national training system will be developed for management of government procurement, and a new, modern, National Procurement system will be designed and implemented following adoption of the appropriate legislation and rules and regulations.

The program is to be carried out by the Presidential Commission on the Modernization of the State.

The IDB 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.

Other governments and international agencies are expected to contribute grants to help finance the program, including the United States ($3 million), Switzerland ($1.4 million) Britain ($1 million), Sweden ($1 million), and Canada ($680,000).

The project is being coordinated with a parallel program of the World Bank to improve transparency and accountability in the management of public finances.

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