Approved US$40-million loan for Ecuador for sustainable development on southern border with Peru

The Andean Development Corporation approved a US$40-million loan to finance the AGUASUR program to upgrade the coverage and quality of the potable water and basic sanitation service in the southern border cordon with Peru. The total cost of the program is US$57 million.

CAF Executive President Enrique García emphasized the social character of the loan, which contributes to solving one of the problems of the southern border with Peru, by supplying potable water and basic sanitation to a population of around 650,000. The project provides a sustainable long-term solution through citizen participation in the management, operation and maintenance of the potable water and sanitation systems, which contributes to the decentralization process in this sector. García also emphasized that the program satisfied the CAF commitment to provide finance for the border region with Peru.

The program is part of the Peace Agreement signed by Ecuador and Peru in 1998, in which both countries decided to execute a series of instruments in an effort to stimulate bilateral cooperation through a joint strategy to promote the economic integration of the border region, speed up development, and overcome the state of underdevelopment in comparison with the other regions of these two nations.

The Ecuadorian government has identified a basket of 302 projects which already have their final studies and whose execution requires US$181 million. The projects will be selected for inclusion in the program by a methodology of legitimacy and priority, which takes into account technical criteria based on equity and the efficiency of municipal government and service providers.

The Program is environmentally and socially viable because of its contribution to improving water supplies and sanitation in the southern border cordon. The risks identified are moderate and controllable since they are linked to the progress of the works.