Announcement of Water Supply Project will Benefit Ninety Percent of Guatemala City's Residents on October 20, 1986

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. BANK NEWS RELEASE NO. 87/20 Contact: Ciro Gamarra (202) 477-5320 WATER SUPPLY PROJECT WILL BENEFIT 90% OF GUATEMALA CITY'S RESIDENTS WASHINGTON, October 20 About one third of the residents in Guatemala City, Guatemala will benefit from a water supply rehabilitation project supported with a World Bank loan of $23 million. Guatemala City is the largest and fastest growing city in Guatemala. Its population of 1.4 million is expected to grow to 2.7 million by the year 2000. The project is the first main step in assisting the Empresa Municipal de Agua (EMPAGUA), the city's water supply agency, to become a more efficient organization, capable of providing satisfactory service without the need for government subsidy. The project further aims at helping to enable EMPAGUA to undertake larger investments which will be needed in the future to expand its services. The project includes measures to improve the financial, administrative, operational, and planning aspects of EMPAGUA's activities. All current consumers in Guatemala City will benefit from a more reliable supply of good quality water. The increased water supply will result in about 100,000 new service connections, serving some 700,000 people. At least 75 percent of these new beneficiaries will have incomes below the urban poverty threshold of $430 each a year. Expected to be completed by mid-1994, the project will cost about $30 million overall. EMPAGUA will provide $6.9 million and the government will provide $0.1 million. The World Bank loan is for 15 years, including five years of grace, with a variable interest rate, currently 8.23 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on the undisbursed balances. NOTE: Money figures are expressed in U.S. dollar equivalents. f