[China Co-Financing Fund] IDB administers $30 million loan from CHC for National Investment Program in Water, Sanitation, and Solid Waste

IDB administers $30 million loan from CHC for National Investment Program in Water, Sanitation, and Solid Waste in Ecuador in 2014 On November 14, 2014, the Inter-American Development Bank (IDB) signed two loan contracts with the Government of Ecuador for the National Investment Program in Water, Sanitation and Solid Waste: a $120 million loan that IDB issued from its ordinary capital (Loan 3232/OC-EC), and a $30 million loan from the People's Bank of China (Loan 3233/CH-EC) via the China Co-Financing Fund for Latin America and the Caribbean (CHC).

The total cost of the project is approximately $202,335,503, which includes counterpart financing totaling $52,335,503.

The IDB approval date for this loan financing was June 25, 2014, and IDB refers to this project as ‘EC-L1122: National Investment Program in Water, Sanitation and Solid Waste’.

The first loan repayment date was scheduled for February 15, 2028 and the loan’s final maturity date is August 15, 2039. As of December 2020, the CHC loan had achieved an 72.4% disbursement rate ($21,732,968 out of $30,000,000).

The National Investment Program in Water, Sanitation and Solid Waste (Programa Nacional de Inversiones en Agua, Saneamiento y Residuos Sólidos) is part of the larger National Environmental Sanitation Macro-Program (Macro Programa de Saneamiento Ambiental Nacional, PROSANEAMIENTO) by the Government of Ecuador.

The project has several main objectives, including increasing and improving access to potable water, sanitation, wastewater treatment, and urban drainage, particularly in intermediary cities.

To accomplish this, funding is being put towards feasibility, design, and engineering studies, as well as construction, rehabilitation, and expansion of relevant infrastructure.

Infrastructure projects were approved in Portovelo, Atacames, Esmeraldas, Rio Verde, Milagro, Macas, Catamayo, and Ambarto.

Another project objective is strengthening municipal governments, as well as the local water and sanitation services providers in the municipalities benefitting from the program.

Over $193.6 million was budgeted for infrastructure, while only $6,933,826 was budgeted for institutional strengthening.

The funds from the China Co-Financing Fund loan, following contract modifications on December 29, 2015, were earmarked for the the execution of infrastructure projects themselves ($27,328,023) and institutional strengthening ($2,671,977).

The project remains in the implementation phase, though as of the PMR Operational Report last updated October 15, 2020, over $141 million (about 94%) of the total project funding (including that from the IDB loan and CHC loan) had been disbursed.

This project is being implemented by Ecuador Development Bank, which is the institution responsible for interfacing with municipal governments and their respective local service providers, in order to distribute both IDB/CHC resources and their own additional funding.

The Water Secretariat (Secretaría del Agua, SENAGUA) is also involved in implementation, specifically the parts of the project focused on institutional strengthening.