IDB approves additional funding for sanitation works in Montevideo to benefit 40,000 people

The Inter-American Development Bank (IDB) has approved additional funding of $42.8 million for the Urban Sanitation Program IV in Uruguay’s capital of Montevideo, which will improve the quality of life of some 40,000 people.The program also will enhance environmental quality in the Bay of Montevideo and the beaches west of the city and protect the quality of restored beaches in the eastern zone.

The Municipality of Montevideo will use the resources to extend coverage of sanitary sewer and storm drainage, increase the amount of sewage receiving proper treatment, and improve the management of sanitation and storm water drainage.

The project includes construction and rehabilitation of sewer and storm drainage works, construction of a disposal system in the west zone to replace the system of multiple raw sewage discharges into the Bay of Montevideo, resettlement of families affected by the sanitation and drainage works, and improvements in managing the sanitation system. This additional financing covers cost increases attributable to external factors, including exchange rate appreciation and higher prices of some materials.

As a result of the project, all of the sewage currently entering the bay will receive proper treatment. In addition, sanitation coverage will increase to 90 percent with the incorporation of 11,000 families into the system.

The supplemental funding ensures that the program will meet its objectives as well as provide financing for the construction of pumping stations, a wastewater pre-treatment plant, and installation of an underwater drainage pipe.

The IDB loan for $42.8 million has a term of 25 years, four-year grace period, and a variable interest rate based on LIBOR. Local counterpart financing totals $7.55 million.