Announcement of World Bank Supports First Urban Development Project in Ecuador on December 13, 1979

FOR IMMEDIAlf_RE.LEASE -A/orld Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 80/29 December 13, 1979 WORLD BANK SUPPORTS FIRST URBAN DEVELOPMENT PROJECT IN ECUADOR Ecuador's first urban development project will be implemented with the support of the World Bank. A $31 million Bank loan will help finance an urban development scheme in Guayaquil, the largest city in\.~ country, benefitting mainly its poor residents. The project will provide improved shelter to 12,700 households and employment to about 5,000 persons. It will directly benefit about 100,000 people, or 10% of the city's population. Nearly 90% of the project invest- ments are targeted to help families whose incomes are below Guayaquil 1 s absolute urban poverty threshold. The project will also help to promote institutional development to address urban needs on a larger scale, both in • Guayaquil and nationwide . The total cost of the project is estimated at $51.6 mi 11 ion. It includes loans and technical assistance for small-scale enterprises, slum upgrading, sites-and-services development, and loans for housing construction and improvement. A feasibility study for an artisans• market in Guayaquil will also be undertaken. This integrated urban development project will involve several Ecuadorian agencies, strengthening each to meet the needs of Guayaquil's low- income population better. Among them are the Municipality of Guayaquil, the Ecuadorian Housing Bank, the National Housing Board, the National Small-scale Enterprise and Artisan Center (CENAPIA), and the Guayaquil commercial banking sector. The $31 million World Bank loan to the Republic of Ecuador has a term of 17 years, including 4 years of grace, with 7.95% interest a year. NOTE: Money figures are expressed in U.S. dollar equivalents . • FORM NO. 1121 (5-76) T ECHN I CA L D A T A PROJECT: COUNTRY: TOTAL COST: Guayaquil Urban Development Ecuador $5 1 . 6 mi 11 i on • BANK FINANCING: $31 mill ion, for a term of 17 years, including 4 years of grace, at 7.95% interest per annum OTHER FINANCING: Government of Ecuador, $14.4 million; commercial banks, $2.7 million; revolving fund, $2.2 mill ion; and small- scale enterprises, $1.3 mill ion. IMPLEMENTING ORGANIZATION: Coordinador, Proyecto Desarrollo Urbano de Guayaquil Banco Central del Ecuador Panam~ 706 Guayaquil, Ecuador PROJECT DESCRIPTION: It includes: a) support to small enterprises: expansion of an existing line of artisan credit through one or more commercial banks in the city; b) services to low-income areas: upgrading (landfill and basic infrastructure) in two substandard settlements, Lotizacion Mapasingue and Guasmo North, and development of 3,700 sites with services in two new areas, Alegr(a. and Floresta Pilot; and c) housing loans: small loans for home improvement and/or construction to an estimated 9,700 residents in the project sites, and in other low- income sections of the city. PROCUREMENT: An estimated $18 mill ion in goods and services will be procured through international competitive bidding in accordance with Bank guidelines. Another $6 mill ion, in contracts under $250,000 each, will be procured through local competitive bidding procedures acceptable to the Bank. Goods and services financed through the small enterprise credit and housing loan components will be procured through normal commercial channels. Landfill and some other works at the Floresta Pilot site will be undertaken by force account. Civil works contracts above $500,000 and equipment contracts above $50,000 will be subject to prior approval by the Bank. CONSULTANTS: About 40 man-months of consultants' services to CENAPIA are included in the project. The services will: (i) improve the marketing support CENAPIA will 0ffer sub-borrowers; (ii) study the feasibility of an artisans' market in Guayaquil; and (iii) evaluate the effectiveness of the credit component. Some 122 man-months of consultants' services to the municipality are included for (i) detailed design, engineering, and supervision of construction; (ii) financial management improvements; and (iii) evaluation of the project. • ECONOMIC RATE OF RETURN: 18% ESTIMATED COMPLETION DATE: 1985 - 0 -