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US$1.5 billion IDB conditional credit line to Argentina to improve informal neighborhoods

The Inter-American Development Bank today announced the approval of a US$1.5 billion Conditional Credit Line for Investment Projects (CCLIP) to Argentina to improve the quality of life in the poorest informal neighborhoods in the country.

With CCLIP resources, the Urban Development and Housing Office of Argentina’s Ministry of Planning will promote urban and social inclusion in poor areas throughout the country by improving the habitat of 250,000 households on a sustainable basis.

The IDB Board of Executive Directors also approved today a US$350 million loan for the first program under the credit line. The first loan will finance 100 projects and the formulation of comprehensive projects to be financed by a second program under the CCLIP.

The program’s strategy includes the provision of basic public utilities, housing improvements and the supply of new dwellings, the granting of titles and the strengthening of social capital. This strategy combines federal as well as provincial and municipal programs dealing with urban and housing issues.

“Argentina’s housing problems are essentially urban, as 90 percent of its population lives in cities, with a heavy concentration in the metropolitan areas of Buenos Aires, Córdoba and Rosario,” said IDB Team Leader Beatriz López. “But despite this concentration, urban agglomerations of between 100,000 and 500,000 inhabitants grow faster, also leading to the  problems of informal neighborhoods or villas de emergencia.”

“The great majority of these villas or shantytowns are centrally located but consist of makeshift dwellings without basic sanitation and drainage services, and their residents lack title to their homes,” added López. “The strategy is to provide a comprehensive solution to their habitat problems by regularizing their status and consolidating them in their present location. Its participatory, comprehensive and cross-cutting approach is very effective in dealing with habitat-related problems in poor neighborhoods.”

The conditional credit line is for a 25-year period. The first loan is for a 5-year period, with a five-year grace period, at an adjustable interest rate. Local counterpart funds for this loan total 40 million dollars.

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