The Inter-American Development Bank today approved a $26 million soft loan to Honduras to promote and consolidate reforms at the municipal level to provide efficient and sustainable potable water and sanitation services.
The Ministry of Finance will channel subloans from resources in a municipal trust fund to finance technical assistance and civil works in medium-sized municipalities that intend to establish operators with enough autonomy to provide services on a commercial basis under a clear regulatory framework.
The program will strengthen the capacity of the municipalities as the entities responsible for potable water and sanitation services and promote formal relationships with operators, service clients, and financial organizations.
The total cost of the project is $29 million.
The IDB loan from the Fund for Special Operations is for a 40-year term, with a 10-year grace period, and at an annual interest rate of 1 percent during the grace period and 2 percent thereafter.
Local counterpart funds, to be provided by the municipalities, total $3 million.