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IDB approves $150 million for Mexico’s Habitat Program

The Inter-American Development Bank today announced the approval of a $150 million loan for the second phase of Habitat, a Mexican program to improve living standards in poor urban neighborhoods.

Habitat leverages resources from the federal, state and municipal governments and program beneficiaries. Between 2004 and 2006, the program invested nearly $1 billion in more than 30,000 projects for urban improvement and social services delivery in 207 cities.

The IDB-financed project, which targets areas with high levels of poverty, combines investments in infrastructure, such as access roads, street paving and drainage systems, with expanding the coverage of services, including electricity, drinking water, sewerage, public lighting and solid waste disposal.

Habitat also finances the construction of community development centers where municipal governments, in coordination with other agencies, can provide such social services as daycare, primary healthcare, domestic violence prevention, job training and assistance for microentrepreneurs.

The program has helped more than 3.2 million people in some 1,200 neighborhoods in every Mexican state since it was launched in 2003.

During the second phase of the program, a number of operational improvements will be implemented, based on evaluations of the first phase. IDB resources will help strengthen municipal capacity to manage social programs and urban development, as well as Habitat’s mechanisms for social audits and community participation in its projects.

Habitat’s management will be strengthened to increase its effectiveness as the lead agency in Mexico’s strategy to fight urban poverty. A new impact evaluation of the program’s operations will also be financed.

The IDB supports other major programs of Mexico’s social development policy, such as Oportunidades ("Opportunities"), a conditional cash transfer program that provides subsidies to poor families that keep their children in school and take them to periodic medical check-ups.

The new loan is for a 25-year term, with a three-year grace period and an interest rate based on LIBOR. Local counterpart funds for the second phase will total $150 million. For the first phase, in 2004 the IDB approved a $350 million loan.


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