IDB Supports Uruguay in Enhancing Water and Solid Waste Management

WASHINGTON — The Inter-American Development Bank (IDB) has approved a $100 million loan to improve Uruguay’s water and solid waste management, focusing on resilience and the circular economy.

The operation, which has been approved by the IDB's Board of Executive Directors, will boost the resilience of the country's water supply system, benefitting the country’s 3.5 million inhabitants, particularly the two million people who live in the Montevideo metropolitan area.

This Policy-Based Loan is the second in a programmatic series consisting of two consecutive operations that are technically interlinked but financed independently.

In addition to improving conditions for the population, the program will benefit the private sector – especially agricultural and industrial enterprises – by improving water quality, providing tools to increase the circularity of solid waste, and incentivizing investment.

Departmental governments will implement plans to improve solid waste management.

The IDB-backed program will also support advances in water loss management, new early warning systems for flooding in several cities, and a new regulatory framework for water pollution.

For solid waste, the main measures will focus on:

• Food. The program will facilitate food donations and reduce the amount of food that goes to landfills by implementing the National Strategy for Reducing Food Loss and Waste.
• Electrical and electronic equipment. As part of the program, Uruguay will begin developing regulations for managing this type of waste.
• Waste from civil construction and demolition projects. Under the program, Uruguay will create guidelines for capturing, recovering, and reusing this waste to keep it out of landfills.
• End-of-life batteries, including from the electric vehicle sector. The program will implement a traceability plan to collect batteries and reuse and recycle their materials instead of sending them to landfills.

The $100 million loan has a 19.5-year repayment term, a 6-year grace period, and an interest rate based on the Secured Overnight Financing Rate (SOFR).