Press Release

OFID extends US$4 million loan to Nicaragua for poverty reduction scheme

40/2006 May 11, Vienna, Austria
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The OPEC Fund for International Development (OFID) today signed a US$4 million loan agreement with the Republic of Nicaragua to help finance an extensive poverty reduction scheme. To be implemented through the country's Emergency Social Investment Fund (FISE), its aim is to provide basic social services and promote socio-economic development in some of the most impoverished regions.

Despite government’s progress made in reducing poverty over the past decade, Nicaragua’s rural regions remain underserved. Many individuals lack access to safe water and sanitation services, resulting in a high incidence of waterborne illnesses, and although primary school education is free and compulsory, only a small number of children complete their education. FISE was established in 1990 to improve living conditions and support local development opportunities among some of the poorest segments of the population. The agency has been instrumental in providing basic infrastructure to rural communities.

The present loan will co-finance a series of small-scale, sub-projects selected by FISE in coordination with municipalities and community organizations. These will cover four priority sectors; namely health, education, water supply and sanitation and rural roads. Beneficiaries will receive maintenance training to insure the project’s sustainability, and capacity-building will take place among government and community organizations. OFID’s loan will be used specifically for the implementation of some 100 sub-projects, benefiting, in all, at least 150,000 people from 153 municipalities.

This represents the third loan OFID has extended to Nicaragua in support of a FISE rural poverty-reduction project. Including this loan, OFID has approved financing to the country totaling US$133 million. These provided balance of payments support, delivered debt relief under the Heavily Indebted Poor Countries Initiative, helped finance commodity imports programs and supported projects in the transportation, agriculture, education, and water supply and sewerage sectors. In addition, one loan has recently been approved in support of the private sector. OFID grants went to provide emergency assistance to Nicaragua, as well as to finance a water supply and environmental sanitation program and technical assistance schemes in the energy sector.

Today’s agreement was signed in Vienna by HE Mr. Norman Caldera Cardenal, Minister of Foreign Affairs of the Republic of Nicaragua, and by HE Mr. Jamal Nasser Lootah, Chairman of the Governing Board of OFID.