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Paraguay to extend water and sanitation services to 190,000 people with support from Spain and the IDB

Grant of $60 million from Spain and IDB loan for $20 will benefit poor and indigenous populations in the Chaco and in medium-size cities in the Eastern Region

Paraguay will provide potable water and sanitation services to poor and indigenous communities in the Chaco and in medium-size cities in the Eastern Region with a $60 million grant from the Spanish Cooperation Fund for Water and Sanitation in Latin America and the Caribbean (Spanish Fund) and a loan from the Inter-American Development Bank (IDB) for $20 million.

The program will benefit 38,000 households with a total of 190,000 people, of whom 40,000 are indigenous.

The program’s objectives include extending potable water and sewerage in areas where these services are lacking or deficient and ensuring their sustainability. Support will also be provided to institutions operating in the sector and to help service providers improve efficiency and management.

The program will provide sustainable potable water service and basic sanitation facilities to poor and indigenous populations in the Central Chaco. Investments will include potable water lines, distribution networks, storage tanks, pumping stations, indoor plumbing, solutions tailored to specific poor and indigenous communities, and systems for capturing and storing rainwater.

The program includes sanitary sewer service and waste water treatment and improvements in potable water systems for residents of intermediate cities in the country’s Eastern Region, including sustainable systems for management and maintenance of these services.

Priority will be given to investments for collecting, treating, and disposing waste water, including household connections; and investments in potable water systems that can be built quickly and that increase revenues for operators, foster energy efficiency, reduce costs, and improve or extend coverage through works that optimize different system components.

"This program will help to bridge existing gaps in sanitation service coverage and improve its sustainability over the long term,” said Jorge Oyamada, head of the IDB project team. "It will also promote levels of water service and sanitation that are critical to Bolivia’s development by improving the health and quality of life of its people."

Of the program’s total estimated cost of $88 million, $60 million will be financed by a grant from the Spanish Fund, $20 million from an IDB loan, and $8 million from local sources.

Of the IDB’s $20 million loan, $16 million was extended from the Bank’s ordinary capital for a term of 30 years with a six-year grace period and a variable interest rate based on LIBOR. The remaining $4 million was extended from the Fund for Special Operations for a term of 40 years with a 40-year grace period and an interest rate of 0.25 percent per annum.

In coordination with the Spanish Agency for International Development Cooperation (AECID), which is responsible for the Spanish Fund, the IDB manages the fund’s resources with the objective of accelerating the expansion drinking water and sanitation coverage in the region and supporting countries in their efforts to achieve the Millennium Development Goals.

Since 2008, the IDB and AECID have jointly supported projects financed by the Spanish Fund in Bolivia, Brazil, Costa Rica, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Paraguay, Peru, the Dominican Republic, and Uruguay. Over this period, Spain has contributed more than $500 million for these projects, enabling the Bank to leverage an additional $500 million.

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