The Inter-American Development Bank today announced the approval of a $71 million loan to the Dominican Republic to reform and modernize its potable water and sanitation services in order to increase the coverage, efficiency, and quality of those services.
The resources will support the transformation of metropolitan utilities of Santo Domingo, Santiago, Moca, and La Romana into competitive government-owned stock companies, with participation of civil society on the boards of directors. The private sector will participate in operations of two of those companies through management contracts.
In addition, the Instituto Nacional de Agua Potable y Alcantarillados, which owns and operates many of the smaller water and sanitation systems, especially in rural areas, will be gradually decentralized into autonomous regional units.
The IDB resources will finance management and coordination costs of the reform program as well as demonstration projects and emergency works, technical assistance, and investments in infrastructure.
The total cost of the program, which will be carried out by the Technical Secretariat* of the presidency, is $89 million. The IDB loan is for a 20-year term, with a five-year grace period, at the variable annual interest rate, now 6.84 percent.
Part of the interest will be defrayed by the Intermediate Financing Facility.
The Multilateral Investment Fund, an autonomous fund administered by the IDB, is expected to provide a grant of $1,080,000 to help place a new institutional and legal framework for the potable and sanitation sector in operation on the national level.
The program is being coordinated with other international lending institutions and donors that are supporting modernization of the water and sanitation sector in the Dominican Republic.