A loan of US$109 million will benefit 55,000 homes and 6,700 farmers in three municipalities
The Inter-American Development Bank (IDB) has approved a $109 million financial package to provide 55,000 homes in the city of El Alto with improved access to potable water, and 6,700 farmers in the municipalities of Pucarani and Batallas with improved access to irrigation services in Bolivia.
The program will have a total cost of $133 million, with $62 million coming from IDB funds and $47 million coming from multilateral development funds administered by the bank. Another $24 million will come from local counterpart funds.
The program includes the following projects:
- Construction of two damns in the Khotia-Khota and Taypichaca lagoons.
- Construction of a water purification plant for El Alto
- Installation of 60 km of potable water pipes
- Installation of a rural potable water system for 13 communities in the municipality of Batallas.
- Installation of 113 km of irrigation pipes in the Jacha Jahuira river basin.
- Installation of 109 km of irrigation pipes in the Kullu Kachi river basin.
It has been estimated that the population of El Alto – at an altitude of 4,150 meters – will grow from nearly 1 million today to 1.5 million in 20 years, and that the demand for water will rise to 54.4 million cubic meters per year. What's more, during the same period climate change may reduce the volume of water available by 10 percent due to the rapid retreat of glaciers in the Andean region.
“Because of the challenges presented by climate change, this program will promote the coordinated management of water resources and the sustainable use of natural resources in the area,” said IDB project team leader Edgar Orellana.
The program has five sources of financing: a loan of US$49.6 million from IDB ordinary capital funds; a $12.4 million loan from the bank's Special Operations Fund; a grant of $42.5 million from the multilateral Strategic Climate Fund; A 4 million euro contribution ($4.37) from the Nordic Development Fund (NDF), established by Denmark, Finland, Iceland, Norway and Sweden; and a local counterpart contribution of $24.15 million.
The $49.6 million IDB loan will be for 30 years, with a five-year grace period and an interest rate based on LIBOR. The NDF loan is for 40 years, with a 40-year grace period and an interest rate of .25 percent per year.
The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.