The Inter-American Development Bank today announced the approval of an $180 million loan to the municipality of Rio de Janeiro to support the second phase of a program to provide infrastructure, social services, and property rights in favelas, the low-income neighborhoods ringing the city and mountainsides.
The resources will finance infrastructure including, among others, water and sanitation, storm drains, roads, electricity and street lighting, garbage collection systems, and environmental protection, such as reforestation to prevent erosion.
The program, known as Favela-Bairro II, represents an integrated approach to community and urban development and will rely on community participation for the planning, execution, and follow-up of the projects, including the operation of social services.
Investments will be made in early childhood development programs and a range of prevention and social support programs for children and teens under 18, which constitute the main at-risk groups in the poor communities of the favelas.
Technical training, technical assistance and complementary educational projects will increase job and income opportunities for favela residents, and technical assistance and training will be made available for agencies and municipal departments* carrying out the program.
The IDB supported the first phase of the program, benefiting 250,000 of the 1.2 million favela residents, with a $180 million loan in 1995.
An estimated 230,000 persons will benefit from the program’s second phase, including 14,000 children.
The total cost of the second phase of the program is $300 million. The IDB loan is for a 25-year term, with a four-year grace period, at the currency pool annual interest rate, now 6.44 percent. Local counterpart funds total $120 million.