Paraguay will expand water and sanitation services with IDB support

Financing will assist development of rural areas, indigenous communities and small towns

Paraguay will expand water and sanitation services in rural areas, native communities and small towns with support from a $40 million loan from the Inter-American Development Bank (IDB). The program is expected to receive another $20 million from the Development Promotion Fund (FONPRODE), a financial cooperation instrument created by the government of Spain.

The loan will allow Paraguay to expand the coverage of basic potable water and sanitation services in rural communities with less than 2,000 people; provide those services to native communities in the western region; and improve the potable water services, sewage and drainage systems and treatment of waste waters in towns with 2,000 to 10,000 residents.

About 40 percent of Paraguay's 6.8 million people live in rural areas, where water and sanitation services have been substantially improved in recent years. More than 870,000 people still lack potable water, however, and more than one million lack proper sanitation services. This project will support the government's efforts to reduce those needs.

The Western region, known as the Chaco, is home to nearly 53,000 indigenous people. Only 15.4 percent are connected to a water supply network, and only 59.2 percent have access to treated water, meaning that more than 21,000 indigenous people in the Chaco require improved access to water for human consumption.

The program also will assist with the construction of sewer and drainage systems and treatment of waster water for 380,000 residents of small cities in Paraguay – those with between 2,000 and 10,000 residents. Those services are now practically nonexistent in those towns.

The program's goals include:

  • Provide potable water connections to 10,000 homes in rural and poor urban areas.
  • Provide basic sanitation services to more than 8,500 homes in rural and poor urban areas.
  • Connect nearly 7,000 homes in small towns to sanitation networks.
  • Extend waste water treatment services to 15,000 homes in rural, poor urban and urban areas.
  • Provide 700 homes of indigenous people with piped access to potable water and individual solutions to basic sanitation.

The $40 million from IDB ordinary capital is for 25 years, with a six year grace period and an interest rate based on LIBOR. The co-financing from FONPRODE is managed by the Spanish Agency for International Development Cooperation (AECID).

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