Brazil’s northern state of Amazonas will obtain an additional $77 million from the Inter-American Development Bank to complete environmental, urban and housing works that will improve living conditions of the poor population living in areas prone to flooding in Manaus, the state’s capital.
The supplementary loan will finance the completion of public works in the Educandos-Quarenta watershed. The works include the construction of more than 3,1 kilometers of public roads, 33 kilometers of sanitary sewer collector networks, two housing complex with nearly 1,000 dwellings, two city parks and expenses related to the resettlement of 2,000 families.
In addition, the loan will support social work activities and health and environmental education to improve the local population awareness.
The supplementary funding for the project will also help cover an increase in costs stemming from a depreciation of the U.S. dollar against the Brazilian currency and other works to achieve the reach of the project. The U.S. dollar has dropped some 44 percent against Brazil’s real since December 2004, when the IDB completed the initial design of the project.
The new financing will complement a previous $140 million loan approved by the IDB in November 2005. Approximately 15,500 people will be free from the frequent flood impacts after the project’s completion.
The new IDB loan, which will mature in 25 years with a 3-year grace period, will finance 70 percent of the total cost of the project. The loan will be denominated in U.S. dollars and will charge the London Interbank Offered Rate (Libor).
The IDB is the biggest source of multilateral financing for Latin America and the Caribbean. Between 1994 and 2008 the Bank provided about $109 billion of loans to the region, allowing the construction of 732,000 kilometers of roads, improved 485,000 hectares of land through irrigation, provided drinking water to 4.2 million households in the region, and connected 2.2 million houses to the sewerage system.
- Romina Tan Nicaretta