World Bank gives USD 40m Loan for Water and Sanitation Project in Panama

Microfinance Focus, May 29, 2010: The World Bank Group’s Board of Directors has recently approved a US$40 million loan in support of the Metro Water and Sanitation Improvement Project in Panama. The Project will expand coverage of water supply for 100,000 people and sanitation services for 60,000; increase efficiency and support the National Water and Sewer Agency, IDAAAN, in its modernization in selected areas of the Panama metropolitan region. The Project will target the areas east of the Panama Canal

The project will increase the quality, coverage and efficiency of the water supply and sanitation services in the lower-income neighbourhoods of the Panama metropolitan region. This is a five-year US$40 million IBRD Specific Investment Loan (SIL), which combines investments and technical assistance financing. The loan has a 20 year maturity that includes a five year grace period. The Government of Panama, through IDAAN’s budget, will contribute US$15 million in counterpart funds.

“Access to drinking water and proper sewage systems is crucial to sustain Panama’s continued growth and development, and the Panama Metro Water and Sanitation Improvement Project is an important contributor to the country’s Development Plan water strategy. It involves crucial investments in water quality and quantity, but most importantly it seeks to boost the efficiency of the State’s water supply and sanitation sector,” said Laura Frigenti World Bank Country Director for Central America.

This project will finance network extension and rehabilitation activities, initially focusing on the neighborhoods of Alcalde Diaz and Chilibre and parts of the district of San Miguelito in the Panama metropolitan region, where service is currently limited for a significant part of the residents and sewer connection rates are lower than in other parts of the region. It will also revisit IDAAN’s approach to work in lower-income settlements utilizing regional good practices and a strong social outreach program that will be developed to ensure that new users actually connect to the networks being built.

© 2010, Microfinance News. All rights reserved. 2008-09