Public Sector Lending in 2001*

*All public sector lending operations in 2001 concerned development project financing.

Guatemala

Sector: Multi-sectoral
Project: Sustainable Management of the Lake Amatitlan Watershed
Amount: $5 million
Terms: Interest rate of 2.5% per annum; 20-year maturity, including a 5-year grace period
Approved: March 27, 2001
Executing agency: Authority for the Sustainable Management of the Lake Amatitlan Watershed (AMSA)
Co-financiers: IDB, Government of Guatemala
Loan administrator: IDB
Total cost: $29.8 million

Populated by some 1.6 million people, the Amatitlan Lake Watershed region is experiencing severe environmental problems. Poor sanitation, improperly constructed landfills and uncontrolled dumping of waste have caused serious contamination of groundwater and surrounding tributaries. Deforestation has also taken its toll, and matters have been made worse by the rapid population growth and lack of cohesive environmental policies. This project aims to introduce a series of environmental protection and restoration measures to help bring the area's fragile ecosystem back to its original, natural state. These include potable water reform studies to help set up drinking water and sanitation systems in five municipalities, and the introduction of solid waste collection coverage. As well, some twenty dikes will be built along the Villalobos River to stabilize the banks, halt erosion and protect villages and farmland against flooding. Additional measures include replenishment of forests and expansion of tree cover to capture more carbon dioxide from the air, and the construction of a new sanitary landfill and recycling plant. Capacity building will be carried out at AMSA to strengthen its ability to plan, implement and control its natural resource management activities. Thousands of families will benefit from the project through improved access to clean water and sanitation and a healthier living environment.

Haiti

Sector: Water Supply and Sewerage
Project: Basic Potable Water and Sanitation Sector
Amount: $6.6 million
Terms: Interest rate of 1% per annum; 20-year maturity, including a 5-year grace period
Approved: November 6, 2001
Executing agency: Ministry of Public Works, Transport and Communications and the Sector Reform Unit
Co-financiers: IDB, Government of Haiti
Loan administrator: IDB
Total cost: $67.6 million

Water and sanitation coverage in Haiti is one of the lowest in the Western Hemisphere, with only around one-third of the population being connected to a piped-in water supply, and few having access to sanitation services. Water delivery is inconsistent due to frequent rationing, and the high incidence of water-borne illnesses has serious health consequences for the population, particularly children under the age of five. Under this project, goals are to rehabilitate and expand potable water and sanitation infrastructure in both rural and urban regions. Works include the drilling and cleaning of wells, and the supply and installation of pumping equipment and treatment facilities. In addition, the distribution network will be expanded and metered house connections provided. From the onset of the project, a surveillance system will be established to monitor the incidence rates of waterborne diseases. In addition to rehabilitating infrastructure, Haiti's entire potable water and sanitation sector will be improved through institutional strengthening and capacity building measures. The health and quality of life of at least 450,000 people in urban areas and 95,00 in rural regions will improve substantially from the project.

A water supply project in Haiti, where only 30% of the population has safe piped water, will improve living conditions for over 500,000 people.

Honduras

Sector: Water Supply and Sewerage
Project: Potable Water and Sanitation Investment
Amount: $5 million
Terms: Interest rate of 2% per annum; 20-year maturity, including a 5-year grace period
Approved: June 14, 2001
Executing agency: Ministry of Finance and Municipalities
Co-financiers: IDB, Government of Honduras
Loan administrator: IDB
Total cost: $50 million

Although Honduras has made strong investments in the water supply and sanitation sector, coverage remains inadequate and drinking water quality poor, especially since Hurricane Mitch struck in 1998, destroying vital infrastructure. Only half of rural households are connected to a piped-in water supply, and as treatment plants exist in only a few cities, the incidence of water-borne illnesses is high, especially among children. Sanitation facilities are also scarce. This loan supports a Government initiative to increase the country's access to water supplies and basic sanitation, giving highest priority to rural and other deprived regions. In addition to renovating existing infrastructure, the project will place emphasis on the implementation of institutional reforms and capacity building measures to insure efficient and sustainable management of the services. Each community will create their own Water and Sanitation Committee to help establish, publicize and disseminate new policies. Once the institutional framework is put into place, a civil works component will provide beneficiary households with potable water supplies and wastewater disposal systems. When completely implemented, this project will supply some 700,000 people with safe drinking water and sanitation facilities, and help reduce the risk of contracting gastrointestinal diseases such as cholera and diarrhea. A safe, reliable supply of drinking water will also be far less expensive, thereby boosting the living standards of participating communities. 

Honduras is working to improve access to safe water and basic sanitation in many rural areas and under-served communities.