Announcement of Nine Million US Dollars Loan to Colombia for Water Supply and Sewerage Projects in Seven Cities on October 5, 1972

,II 1 INTERNATIONAL BANK FOR . . RECONSTRUCTION AND DEVELOPMENT 1818 H STREET. N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank Press Release No. 72/62 Subject: $9.1 million loan to Colombia October 5, 1972 for water supply and sewerage projects in seven cities The World Bank has approved a loan of $9.1 million equivalent to help finance water supply and sewerage projects for seven medilDil-size cities in Colombia. The total cost of the various projects is estimated at $15.S millio~ equivalent. The Bank loan will finance one-half of the cost of construction ($7. ,\ million), consulting services, and interest during construction on the Bank is loan. Most of the water supply and sEiwerage systems in Colombia have lagged behind the rapid growth o,£ the urban population. Because of a large and steady migration from rural areas, particularly to the largest urban centers, • the number of urban inhabitants as a percentage of the country's population increased from less than 40% in 1960 to 57% in 1970. The inability of most m\lllicipalities to IIX>bilize local resources has prevented them from providing adequate water and sewerage services to urban population. As part of the Government's policy in this area, measures are being taken to mobilize additional resources through adequate tariffs. Although the sector has grown relatively rapidly during the past six years, it is estimated that about one-fourth of the urban population still lacks direct access to water supply and sewerage services. The Bank loan will help overcome the serious deficiency in water supply and sewerage in seven cities with populations betwen 80,000 and 300,000: Armenia, Manizales, Neiva, Pereira, Tulua, Buenaventura, and Santa Marta. The project in Buenaventura does not include sewerage works. Of the seven cities included in the project, five are responsible not only for water supply but also for other pllblic services such as power, telecommunications and slaughterhouses. The j:mproved services will be provided in areas mainly inhabited by lower-income groups. 'Xhe purpose of the project is to insure that some 1.6 million people, or • double the population being supplied now, will be served with an adequate supply of wholesome water. The seven-city project will also substantially improve sanitary conditions, and help to reduce pollution of streams.  Bank P.R. No. 72/62 -- Colombia -- sewerage - 2 - The Bank loan will be channeled to the beneficiaries through the National Institute fa>r Municipal Development (Instituto Nacional de Fomento Municipal -- INSFOPAL). INSFOPAL's main functions involve preparation of public investment programs in the water supply and sewerage sector, con- struction of such projects in coDDDunities of more than 2,500 inhabitants that do not have their own water supply companies, and supervision of con- struction of projects financed with Government funds. At present, INSFOPAL operates in more than 750 towns, and systems under its control cover areas having 25% of Colombia's population. In order to improve its administrative and organizational structure, INSFOPAL recently reached an agreement with the Pan-American Health Organization {PAllO) for managerial assistance, part of which will be financed tmder the Bank loan. As part of INSFOPAL's plan to work closely with the • World Bank to improve its planning, preparation and implementation of projects, it has established a new unit -- the External Credit Office -- to carry out projects using both national and foreign resources. This new unit will be responsible for supervision and execution, as well as other aspects of t~e work involved in the seven-city project. Contracts for civil works and equipment purchases will be awarded on the basis of international competitive bidding in accordance with Bank guide- lines for procurement. The loan will be made to INSFOPAL, with the guarantee of the Government of Colombia, for a period of 25 years, including four years of grace, with an interest rate of 7~% per annum. - 0 - • .I' • TECHNICAL DATA October 5, 1972 PROJECT: Medium size cities' water supply and sewerage COUNTRY: Colombia TOTAL COST: $15 .5 million BANK FINANCING: $9.1 million loan, 25 years, 4 years of grace, 7~% interest per annum. OTHER FINANCING: National Loan ($5 .41 million equivalent) and internal cash generation. IMPLEMENTING ORGANIZATION: Instituto Nacional de Fomento Municipal (INSFOPAL), Centro Administrative Nacional, Apartado Aereo No. 86-38, Bogota, D.E. Colombia. Telephone: 449823. PROJECT DESCRIPTION: Seven projects, consisting of construction of one new • water treatment plant of 560 1/sec capacity, expansion of four water treatment plants (560 1/sec to 800 1/sec; 670 1/sec to 1000 1/sec; 400 1/sec to 700 1/sec; 300 1/sec to 400 1/sec); construction of water wells with total capacity of 400 1/sec; construction of distribution systems with total length of 190 Km of 3" to 36" diameter pipe; construction of distribution storage with a total capacity of 66,000 m3; construction of 40 Km of sewers varying in size from 10" to 36" diameter. PROCUREMENT: Civil works, treatment plant equipment, water pipes with valves and fittings, water well equipment, sewer pipes, water meter shop equipment, water leak detecti.on equipment, sewer maintenance equipment, management and engineering services (already committed) • In temational competitive bidding. Bank will finance 100% of cost of imports, from 31 to 45% of local cost. Colombian suppliers (except pipe suppliers) and contractors will be allowed a preference of 15% of the CIF cost. CONSULTANTS: Various Colombian firms. ESTIMATED COMPLETION DATE: December 1975. - 0 - •