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Bolivia and WB Sign US$77.5 Million Loan Agreement to Support Key Development Areas

11 February 2008

The Government of Bolivia and the World Bank signed today a US$77.5 million loan agreement to finance five projects in the areas of education, agricultural development, rural investment, sustainable development, and natural disaster prevention that will create opportunities for and improve the quality of life of the poorest sectors of the population.

The loan agreement was signed at World Bank headquarters by Bolivia’s Ambassador to the US, Mario Gustavo Guzman, and by Carlos Felipe Jaramillo, World Bank Director for Bolivia, Ecuador, Peru, and Venezuela, in a ceremony attended by Felix Alberto Camaraza, World Bank Executive Director for Bolivia.

“The Government of Bolivia is committed to the poorest sectors of its population and the World Bank’s support is based on a dialogue grounded in the country’s development priorities as defined in the National Development Plan of President Evo Morales’ administration,” said Bolivian Ambassador Mario Gustavo Guzmán.

The agreement includes US$20 million for the Second Participatory Rural Investment Project; US$20 million for the Lake Titicaca Local Sustainable Development Project; US$15 million for the Land for Agricultural Development Project; US$10 million for the Municipality of La Paz Secondary Education Transformation Project; and US$12.5 million for the Prevention and Management of Natural Disasters Project.

The Lake Titicaca
photo: Martin Friedt

"Bolivia has improved the quality of life of its population as well as access to basic services and social indicators. However, the country still faces poverty and inequality challenges, and we are proud to be the Government’s partner and to work together to solve them," said Carlos Felipe Jaramillo.

The Second Participatory Rural Investment Project covers 182 municipalities, 71 of which will receive support for improving rural transport links, while the remaining 111 will receive more integral support covering all aspects of productivity. These 111 municipalities were chosen because of their high poverty levels, job creation potential, and high share of indigenous population. An estimated 14 percent of the Bolivian population lives in this area, including more than 4,000 rural communities belonging to the Aymara, Quechua, Guaraní, Chiquitano, and Mojeño people. The Project is expected to serve at least 230,000 people and 38,600 households.

The Lake Titicaca Local Sustainable Development Project will be used to promote tourism, protect the area’s archeological and cultural heritage, provide basic services to the local population, and strengthen local government management capacity. The proposed measures aim to mitigate the severe water pollution that results from debris and waste being thrown into the lake by the surrounding communities.

The Land for Agricultural Development Project will establish a decentralized land distribution system that allows organized landless or poor farmers to acquire agricultural lands and implement investment subprojects that will help them to improve their income and living standards. The project will benefit around 2,200 poor rural families, which represents roughly 20 percent of the total number of families nationwide that have requested land allocations from the Government. It targets a mostly indigenous group of extremely poor people in the eastern lowlands, one of Bolivia’s most productive regions.

The Municipality of La Paz Secondary Education Transformation Project will support the La Paz Municipal Government’s education strategy by increasing access to secondary education for adolescents and young people and improving their permanence in the education system. The loan will also help to improve the quality and relevance of primary and secondary education and to strengthen the decentralized education management capacity of the Municipality.

The Prevention and Management of Natural Disasters Project will be used to considerably improve the government’s capacity to respond to natural disasters, and will include components such as damage prevention and mitigation, infrastructure reconstruction, and rehabilitation of the extensive affected areas. Among other activities, the project will finance smaller schemes such as school repair, housing, health clinics, bridges, roads, and irrigation systems, as well as building dykes on riverbanks and constructing filtering tunnels and all the works necessary to protect inhabitants of the five most vulnerable areas.

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