IDB loan will improve Uruguay's sanitation and water quality

By Richard High15 December 2008

An Inter-American Development Bank (IDB) credit facility of up to US$ 80 million has been approved to help finance expansion of Ciudad de la Costa's sewer network and improve water quality in rivers, beaches.

An initial loan of US$ 43 million will be used by Uruguay's National Water Supply and Sanitation Administration to expand Ciudad de la Costa's sewer system and to build a new effluent treatment plant that will serve the needs of the coastal region in the Department of Canelones. The IDB could also approve additional financing for a total of US$ 80 million for the project, according to a statement on its website.

The population of Ciudad de la Costa has doubled over the last decade, to about 120000, but infrastructure investments have not kept pace, leading to problems with the contamination of rivers and groundwater, according to the IDB. Flooding due to inadequate drainage systems also threatens the quality of nearby beaches and the local environment.

The IDB financed program will "coordinate integrated investments" in sewage collection and treatment, storm water drainage and roads, with the aim of lowering costs, protecting the environment, and reducing inconvenience to local residents.

Increased coverage of sanitary sewer service and the new treatment facility is expected to enhance the city's overall environmental health, especially as regards water quality in the Arroyo Pando river and related aquifers.

The IDB loan is for 25 years, with a four-year grace period and an adjustable interest rate. It will be disbursed over a four-year period. Local counterpart funds for the program total US$ 39.5 million.

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