Announcement of Mexico's Environmental Program Assisted by World Bank Loan on April 15, 1992

18 H t is ingt 3 ae lephone 2Q 477 2 93" Iea1 Will- - BANK -,S CA.OSE92J68zAC Contact. >ciro G IM6rra Sthe s uat approval of the 1 r (202)>473-87211- ~ 2~17 pr ½:cud r~as 1n 12 state ce Mexico >MXEXO 8 ENVIBONMENTAL PROGRAM ~ASS1STED -BY WOLD DMANK LOAN ( WASHINGTON, "D.C¥, ,~April iI5 1992;--: The first ,phase of -Mexico'.s ,* énvironntärprogramMll be éIåaöllved by sa Wotld1Bank loan of $50 millin and a$30 millioigraritfirotå,the Global gnvironment) VaéilityY(GEF) .is The läan'and gkant14llIenable the government to carry o'! environmental protection and natural-resource management acti . and to etrengthen the sectårts *institutional and policyiframework to c.ac·e iIn a mor o f ont and idecentralized manner. 3 The 126.6 milliön,ptaöct7,istdssignäd to upgrade the i, the central cironmentaltauthofity to include supervision and c t -on of 4 Io ntal work caried out by other levela of governme; :: federal mex i racs :a eîéâö sericus environmental Lchallengea luding: a ir p.J,>1 aic A:in~ maidetmåtropolttán areas;rpaÉticuldfly Mexico CI# ter e ar et 4atet 2pdllutlon from dicharges of uitatad waotewater3 fro .nLaarv and municipalitie;aand from improper'.disposal of sr<dous IwastooJ oion; and deforeståtion and destruction of natural *ccwmns w :h c 4 1 of vgxico's rich biological diversity. C4 percant of total project costs will finance key environmenta serv. . luding monitoring and contsolling water and air pollution., minimii i,g potential negative anvironmental impats of public and prlvatei invate.ant projectg; and ronnerving biodiversity. A pilot caentralization program in up to f ive states and special _i~s t. - _lre the use of economic instrumente to complement the current -pproach to - 4ronmental managment will allo bo part of the project. The 4rojoct wiii- include preparation of additional technical standarde for pollution constrol and natural-resource protection, and four pre-invostaant studieo for preparation of the second phann of the program. LCTE: Money figures are expressed in U.S. dollar quivalente. 2 7 3 get co'ts will be financed wh terpart rnd $46`6 million and by a grant of 30 millio of the Yäan will be fully diebursed in folir years. m 30 million grant from the GEF was approved in March 1992, eubject t lbequent approväl of the World Bank loan, and will finance a program pr otected areas LnU12 states of Mexico. This grant, the firat for Mexico from the GU, will be disbursed over four years. The GEY In a three-year pilot program to provide grantg for projects that help developing members addreoc global environmental issues. The project's key components are expected to result in reduced air and water pollution, systematic evaluation of potential negative environmental of fects of public and private sector investments and design of j tating activities, and protection of endemic and endangered species and Liclogical divåreity of global Importance. Äitj project will complement on-going and proposed projeets in agr .. - , infrastructure and mining that rely on an adequ - itutional seL .; envirounmental sector to ensure compliance u' n -. v norms. Two projecta to assist in reducing a in the metropov.' area of Mexico City and to support efforts to i erosion e' et -!-o ared. The $50 mniljlon World Bank loan was made to the Banco dO cbras y Servicios Publicos (BANOBRAS) with the guarantee of the Uni :.J Mexican Scites. The loan is for 15 years, including fivu years of grace, with a variabIle interest rate, currently 7.73 percent, linked to the cost of tho 5.nk'y 1VLnowings. It aleo carrios an annual conmitment 3 :f 0.25 the undisbursed balance. -0-..