Microfinance Focus, September 8, 2011: The Inter-American Development Bank (IDB) approved a $100 million loan that will benefit 11,000 low-income households by improving or expanding access to water and sanitation services in approximately 68 rural communities in Venezuela.

The total cost of the program will be $125 million, including $25 million in counterpart funds provided by the Bolivarian Republic of Venezuela. The project will be executed by HIDROVEN C.A. (Hidrológica de Venezuela), a unit within the Ministerio del Poder Popular para el Ambiente. The IDB loan has an amortization period of 25 years, with a 4-year grace period and an interest rate based on LIBOR.

The program will have two components. The first will include measures to strengthen the capacity of local water and sanitation community organizations and service providers so that they can effectively contract and supervise infrastructure works and manage the services sustainably. This component will also include education activities in beneficiary communities, to ensure that stakeholders understand the public health and environmental benefits of water and sanitation services.

The second component will finance technical studies, project design, construction, expansion and rehabilitation of water and sanitation infrastructure in approximately 68 communities. These works will include wells, water treatment systems, distribution pipelines, storage tanks, in-home connections and septic tanks.