CAF signs $100 million loan agreement with OSE in Uruguay

(Montevideo, Dec. 17, 2012).- CAF –development bank of Latin America– signed a $100 million contract with Administración de las Obras Sanitarias del Estado (OSE), Uruguay’s water utility, to partially finance the program of improvement and restoration of drinking water and sanitation systems, a priority in the state agency’s Five-Year Investment Plan.

The agreement was signed at the nation’s Economy Ministry by CAF country representative in Uruguay Gladis Genua, OSE president Milton Machado, OSE secretary general Vilche Gustavo Pérez and economy minister Fernando Lorenzo, on behalf of the Uruguayan State as guarantor of the loan.

“The main objective is to contribute to improving the living conditions of Uruguayans by expanding and improving the coverage, quality, efficiency and reliability of drinking water and treatment in the country,” said Ms. Genua, who emphasized the program’s social nature.

Genua said that in the last five years CAF has been working with OSE in other drinking water and sanitation projects, including the Treatment and Effluent Disposal Project of the Maldonado-Punta del Este System.

“CAF’s comprehensive agenda to promote sustainable development and regional integration places special emphasis on social inclusion and environmental protection and, in that sense, addresses issues related to water through four lines of action: basin management and protection; irrigation and agricultural development; drainage and flood control; and water services and sanitation, supporting projects in order to ensure universal access and optimize the quality of drinking water and sanitation services, thus improving social and environmental conditions, as well as competitiveness,” Genua said.

For his part, Mr. Machado said “part of the investment will be used for the water treatment plants in Salto, Paysandú, Mercedes and Colonia,” adding the projects “will improve living conditions as well as the environment.” He also noted that financing will be used for raising the Paso Severino dam and reinforcing its structure, which “is essential to increase water storage capacity.”

Specifically, the program provides funding for investment in drinking water projects such as increasing the reservoir capacity and safety of the Paso Severino dam, support for the Settlements Regularization Plan, the restoration of three pumping stations and diverting a pumping line. Additionally, projects elsewhere in Uruguay include the expansion and restoration of the water treatment plant in the city of Paysandú, the construction of two new water treatment plants in the cities of Melo and Mercedes, and improvements in the water treatment and distribution systems in several cities.

In terms of sanitation, the operation involves the implementation of a set of prioritary investments and projects across the country, such as the construction of six waste water treatment plants, and the restoration and networks restoration and expansion in the cities of Salto, Fray Bentos, Mercedes, Colonia, Paysandú and San Gregorio de Polanco; support for the National Sanitation Connection Plan; and building environmental regional laboratories.

The program also includes a component for improving OSE’s management through the construction and operation of a new data processing center.