Rio de Janeiro gets $150 million IDB loan to improve living conditions in Favelas

Rio de Janeiro, Brazil’s second biggest city, will get a $150 million loan from the Inter-American Development Bank (IDB) to improve living conditions in low-income neighborhoods, known as favelas.

The IDB will help finance public works to improve water and sewerage services, drainage systems, road surfacing, street lighting, the provision of green areas, sports fields, and recreational areas, and the construction and equipping of social service centers. The program will target 30 favelas and six unregulated settlements and it is expected to benefit 100,000 people.

“With its ambitious Morar Carioca initiative, Rio has set itself the goal of fully integrating and upgrading the city’s low-income neighborhoods by 2020,” said IDB President Luis Alberto Moreno. “This effort builds on the pioneering Favela-bairro program that the IDB is proud to have supported and which we are now helping to replicate in other large Latin American cities that are committed to social inclusion and a better quality of life.”

The Bank will support social programs to reduce violence, drug use and improve job prospects, particularly for the most vulnerable families and young people. The project will support the regularization and control of urban development in the favelas, including property regularization and the prevention of community expansion.

The project will also support the implementation of a pilot project on citizen security, whose goal is to promote actions that reduce factors associated with violence and improve security conditions for community residents. The pilot project will eliminate dark and isolated areas, open public squares; promote campaigns to discourage drug use and domestic violence; as well as introduce community guards and activities to set up community networks.

“Security has become the number one concern of people in many of our cities,” President Moreno added. “Rio is generating path-breaking solutions to this problem by integrating infrastructure improvements with new approaches to law enforcement and preventive activities like organized sports that create safe alternatives for young people.”

The expected results of the project include:

  • Regularization of 18,000 domiciles and issuance of 3,000 property titles
  • Creation of 28 new child development centers serving as many as 3,360 children of up to six years of age
  • Construction and equipping of two fixed-site Social Welfare Referral Centers and 10mobile ones, that will provide social services to families living in vulnerable situations and provide access to municipal and federal assistance programs
  • Implementation of five new centers that will provide social services for as many as 2,500 at-risks youths of 17 to 25 years of age

Since 1995, the IDB has been supporting works to improve living conditions in low-income neighborhoods in Rio de Janeiro. The bank has supported the first and second phases of the city’s neighborhood upgrading plan, also known as Favela-bairro, with loans totaling $360 million.

The latest IDB loan, which supports the third phase of the city’s neighborhood upgrading plan, will finance half of the total cost of the project while the municipality of Rio de Janeiro will finance the other half. The IDB loan is for 25 years, with a five year grace and disbursement period, and a variable interest rate.