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IDB approves $30.6 million loan to Honduras for secondary education and job training

The Inter-American Development Bank today announced the approval of a $30.6 million concessional loan to Honduras to support the country in its achievement of the goals of a Poverty Reduction Strategy, increasing the coverage of quality secondary education and improving the job skills of youth and adults.

According to IDB Project Team Leader Carlos Miranda, the program is expected to help more young Hondurans gain access to better jobs or go on to higher education. About 52 percent of Honduras’ 6.5 million people are under 20 years old.

The project consists of two subprograms, one dedicated to secondary education and the other to job training through public-private service intermediation.

The secondary education subprogram, to be carried out by the Ministry of Education*, will increase the coverage of grades 7 through 12. School buildings will be refurbished to make room for more students in areas with high levels of unsatisfied demand for education. Distance learning programs with proven track records will also be expanded to serve more young people in rural areas.

Another component will provide technical assistance and training to improve schools with high dropout and grade repetition rates. The Ministry of Education’s human resources management capabilities will be strengthened to improve the allocation of teachers to meet unsatisfied demand for secondary education. Public information activities will seek to raise popular demand for education and solidarity with young people left out of the school system.

The labor subprogram, which will be carried out by the Ministry of Labor and Social Security (STSS)**, is aimed at increasing the employment opportunities of the unemployed or underemployed. It also seeks to involve the private sector in developing workplace job training mechanisms tailored to the specific demands of the Honduran labor market.

To that end, the Labor Ministry will engage CADERH, a not-for-profit organization established by business, labor and professional leaders to improve technical and vocational education in Honduras, and it will also enlist the collaboration of COHEP, a private sector federation.

Trainees will receive a stipend for up to three months and insurance for work-related accidents. The government and the private sector will establish a job placement service to link people looking for work with organizations in need of workers. COHEP already runs an electronic jobs database that will be a key tool for the new service.

The IDB will coordinate this program with other initiatives to increase the quality and coverage of Honduran education financed by the World Bank, the U.S. Agency for International Development, the European Union and other donors.

The loan is for a 40-year term, with a 10-year grace period. The annual interest rate will be 1 percent during the first decade and 2 percent thereafter. Local counterpart funds will total $3.4 million.

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