The Inter-American Development Bank today announced the approval of a $40 million loan to the water and sanitation company of Quito, Ecuador, to support the first phase of a $110 million program to expand water and sanitation services and reduce flooding and landslides.
The resources will enable Quito’s Empresa Metropolitana de Alcantarillado y Agua Potable to extend water and sewerage service to low-income sectors of the population that are currently without service.
Investments will also be made in flood and slope control systems, construction of green areas in slope management intervention zones, establishment of community microenterprises for trash collection, community training to ensure awareness of problems and popular participation in the program, and the resettlement of more than 54 families living in risk areas.
By the end of the second and final phase of the project, water service will be delivered to 200,000 people who were previously without service and sewer service will be delivered to 74,000 additional persons.
Consulting services will be contracted to privatize 50 percent of the company’s commercial operations. For the other 50 percent, consulting services will be contracted to reformulate existing contracts with third parties to raise efficiency.
The municipality of Quito will be strengthened in its capacity to implement its land use management plan, and investments will be made to strengthen the efficiency and institutional capacity of the Empresa Metropolitana de Alcantarillado y Agua Potable.
The program follows the Bank’s strategy of reducing vulnerabilities to natural disasters, modernizing the state, and reducing poverty through investments in sanitation that benefits low-income groups. The project will build on previous experience in the water and sanitation sector programs in Quito that were supported with seven IDB loans totaling $207.5 million.
In 1994 the IDB loaned Quito $41 million to rehabilitate the historic center of the city, which was declared a World Heritage Site in 1979 by the United Nations Educational, Scientific and Cultural Organization.
The new loan is for a 25-year term, with a four-year grace period, at the variable annual interest rate, now 5,39 percent.
As the program completes its objectives, the IDB is expected to approve a second loan of $54 million for Phase II of the project.
Local counterpart funds will total $10 million for the first phase and $6 million for the second phase.