Announcement of Water Supply Project in Mexico has Special Component Supporting Women on June 16, 1989

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. *Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 89/96 Contact: Ciro Gamarra (202) 473-8721 WATER SUPPLY PROJECT IN MEXICO HAS SPECIAL COMPONENT SUPPORTING WOMEN WASHINGTON, June 26, 1989 -- Mexico's efforts to improve the living standards of low-income groups, especially women, will benefit from a $20 million World Bank loan, the first from the Bank that combines support for a water supply and sanitation project and productive activities that focus on women. The project will be carried out in the states of Michoacan, Queretaro and Hidalgo. It will provide about 200,000 people with improved water and sanitation services and generate increased incomes for about 5,000 households from productive activities promoted under the project. The project includes a line of credit for installing water supply and sanitation systems in about 200 communities. It also includes maintenance of water systems, including procurement of equipment, and technical assistance and training. Lines of credit will also be available to finance investment and working capital needed by low-income beneficiaries to start productive activities, such as growing roses in greenhouses, fish farming, manufacturing women's clothing, and raising poultry. Women are expected to participate extensively in these activities. The project allows the World Bank to focus its lending on groups that had not been directly assisted but which have priority needs. It also provides for strengthening of the operational capabilities of state water agencies. As a pilot scheme, the project is expected to provide a model which can be replicated in other areas of the country and contribute toward improving the living conditions of poor people in Mexico. The $20 million loan was made to the National Development Bank for Public Works (BANOBRAS) with the guarantee of the United Mexican States. BANOBRAS will relend $17 million to the state water companies and to the local financial intermediaries that will provide investment credit to individuals or associations from low-income communities. The total cost of the six-year project is estimated at $28.5 million. Other financing will be provided by the government ($6.5 million) and by the beneficiaries ($2 million). The World Bank has supported four water-supply projects in Mexico with loans totaling $355.3 million between 1973 and 1983. NOTE: Money figures are expressed in U.S. dollar equivalents. -2- The new World Bank loan is for 17 years, including five years of grace, with a variable interest rate, currently 7.65 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on the undisbursed balance. -0-