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IDB approves $15.2 million to support modernization of land ownership rights in Ecuador

The Inter-American Development Bank today announced the approval of a $15.2 million loan to Ecuador to help establish a modern, reliable and continuously updated system to secure land ownership rights. The program is also designed to improve the system of adjudicating public land to farmers.

The resources will be used to regularize land tenure in nine rural cantons, which will serve as pilot experiences to reduce costs, support decentralization and improve institutional cooperation in the first stage of a reform that will to be applied eventually to the rest of the country. The program was designed based on a strong process of consultation with stakeholders and the national level and with local communities.

The capacity of the National Agrarian Development Institute will be enhanced to enable it to effectively and efficiently adjudicate land at the national level, and systems will be implemented at the municipal level to regularize rural land tenure, establishing cadastres and integrating them with property registries. Agreements with the Ministry of Environment will be implemented to ensure proper attention to sustainability issues

A component of the program, to be carried out by the Ministry of Agriculture*, will provide $1 million for a competitive fund that will provide grants for small-scale rural environmental and rural development projects as an incentive for small farm owners to properly register their property.

By upgrading, decentralizing, and integrating its property registration and cadastre systems, now governed by legislation based on principles established as far back as 1829, Ecuador will create a more modern and attractive investment climate in agriculture, as well as provide a better information platform for fiscal sustainability and resource management at the local level.

The program is expected to generate savings of up to $43 million through greater efficiencies in adjudicating, titling and registering land and, in the selected communities, double municipal tax revenues. It reflects the IDB strategy for Ecuador of promoting modernization of the state and will also enable the government to more effectively address the questions of economic informality and gender equity.

The total cost of the program is $16.88 million. The IDB loan is for a 25-year term, with a four-year grace period, at the variable annual interest rate, currently at 6.97 percent. Local counterpart funds total $1.68 million. Part of the interest will be defrayed by the Intermediate Financing Facility.

In other operations, the IDB has provided financing for land and property regularization programs in Costa Rica, Jamaica, Nicaragua and Peru.

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