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IDB supports irrigation improvements to boost Bolivia’s farm productivity

The Inter-American Development Bank (IDB) has approved a loan in the amount of $158.4 million to improve small farmers’ income in Bolivia’s rural areas.

The project, which represents the third stage of Bolivia’s Irrigation Program with a Watersheds Approach (PRONAREC), will directly benefit more than 20,000 farmers by improving or increasing the areas under irrigation. In particular, the program aims to provide or improve irrigation systems in 25,000 hectares of farmland using efficient water-use technologies, and to support the development of local water resource management plans over the next four years.

The agriculture and livestock industry is the main economic activity for 77 percent of Bolivia’s rural population and accounts for 13 percent of the country’s GDP. Irrigation coverage improvements can dramatically boost farm productivity. It is estimated that currently 41 percent of the country’s area experiences water resources deficits.

Eighty-five percent of the loan’s total amount is for a 30-year term, with a 6-year grace period, at a LIBOR-based interest rate. The remaining 15 percent, from the Bank’s Fund for Special Operations, is for a 40-year term, with a 40-year grace period, at 0.25 percent interest. The loan will be executed by Bolivia’s Environment and Water Ministry over five years.

About the IDB

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source oflong-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.