• US$250 million loan tied to program to reach universal service coverage in Colombian cities and sharply reduce the coverage gap in rural areas by 2019
Nov 26, 2008 -- Colombia will consolidate its water and sanitation service delivery model and will seek to accelerate service expansion efforts as part of a Programmatic Policy-based Loan (PBL) for US$250 million approved by the Inter-American Development Bank.
This operation is the first in a series of up to three loans in support of policy reforms intended to help Colombia implement more effective and equitable social policies in the water and sanitation sectors.
The PBL is a fast-disbursing instrument that enables Colombia's Treasury to finance programs according to its fiscal priorities, so long as it advances reforms in a particular economic sector. This program to support the consolidation of reforms in water and sanitation reflects Colombia's commitment to carry out adjustments in the legal, political and institutional framework governing this sector.
Specifically, Colombia intends to meet goals regarding the equity, efficiency, quality and sustainability of its water and sanitation services, and to reach universal coverage in urban areas and make significant progress in rural areas by 2019. These objectives will be met through adjustments to laws, administrative procedures, policies and the regulatory and institutional framework in water and sanitation.
Under the current operation, Colombia intends to increase urban water service coverage from 94.5 percent to 97.8 percent in 2011, and in sanitation from 90.1 percent to 93.2 percent. This would mean that 3.2 million and 3 million additional people, respectively, will have water and sanitation services as a result of the reforms.
The policy reforms are also intended to improve the efficiency of investments in service expansion by at least 33 percent, which would generate benefits in increased service coverage whose net present value would exceed US$320 million.
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