News banner image

News

Low-income households in Greater Buenos Aires will gain access to natural gas services with the help of IDB fund
MIF, the Multilateral Investment Fund of the Inter-American Development Bank, will fund a project to benefit more than 7,000 low-income households in the Greater Buenos Aires Metropolitan Area, by providing them access to the city’s natural gas network.

The funding consists of a $3 million loan and a $690,000 technical assistance grant, and provides a new business model that empowers low-income communities, by organizing them to collectively demand for gas services, build the additions to the external network, and install home service connections to the network themselves.
  The project replicates a successful community participation model called Fideicomiso Redes Solidarias (FRS) that expanded the gas service network to 4,000 families in five Buenos Aires neighborhoods. After three years in operation, 60 percent of the families in the FRS project area had natural gas service in their homes, and the estimated savings generated as a result of fuel substitution were $210 per year per family, or around 5 percent of their annual income.   “Seeing the difficulties in access to sustainable and reliable energy sources in this area, we realized that we could leverage resources to improve the situation” said Julie T. Katzman, FOMIN’s General Manager. “This project is aligned with the MIF strategy, focusing on facilitating access to economic activities for all.”   Access to basic services is the first step towards growth, and this project will allow these households to benefit from access to a reliable, less expensive source of natural gas energy and from savings associated with reduced energy costs. This will also generate new economic opportunities from improved energy access, and improvements in health.   The executing agency for the project is the Fundación Pro Vivienda Social (FPVS) (Foundation for Social Housing), a local non-governmental organization working on microfinance initiatives and community development that was involved in the pioneering FRS project. Additional financing will be provided by Banco Supervielle, a local commercial bank interested in microfinance down-scaling. Total counterpart financing will equal the MIF contribution.    About FOMIN

MIF, a member of the IDB Group, provides grants, loans and equity investments for innovative projects that promote access to basic services, finance, markets and skills and capacity for the majority in Latin America and the Caribbean (LAC) through private sector development. Established in 1993, FOMIN is the largest source of grant financing for LAC, focusing primarily on micro, small and medium enterprise (MSME) development.