MercoPress. South Atlantic News Agency

IDB grants funding for Paraguayan environmental undertaking

The project will contribute to the recovery of degraded areas and improve the conditions of Lake Ypacaraí

Paraguay has been granted US$ 154 million in loans from the Inter-American Development Bank (IDB) plus a US$ 7.7 million non-refundable contribution through the IDB CLIMA program, the Economy Ministry in Asunción announced Wednesday. The funding is to be allocated to improving the environmental conditions of the Ypacaraí Lake basin, in Central Paraguay, it was also explained.

Lake Ypacaraí is not only a crucial source of drinking water for the city of San Bernardino, department of Cordillera, but also an important tourist and agricultural spot.

The project will not only improve its environmental status but also ensure more sustainable and climate change-resilient development for the entire region, marking the beginning of a comprehensive plan to promote low-carbon development and strengthen sustainable water and sanitation management.

The IDB loan includes a 23-year term, with a seven-and-a-half-year grace period and an interest rate based on SOFR, which reinforces the IDB's commitment to sustainable financing solutions.

The plan, aligned with IDBImpact+ objectives, seeks to increase sanitation and wastewater treatment coverage in the cities of Capiatá, Itauguá, and Areguá, in the Central department, and San Bernardino in Cordillera, benefiting more than 28,900 households.

These works include the construction of 370 kilometers of sewerage networks, 48 kilometers of impulsion lines, pumping stations, and a wastewater treatment plant capable of eliminating contaminating nutrients.

In addition, the project will contribute to the recovery of degraded areas and improve the conditions of Lake Ypacaraí, indirectly benefiting more than 815,000 people throughout the basin, who will have a cleaner environment and revitalized recreational and tourist activities. It will also strengthen the capacities of the Ministry of Public Works and Communications (MOPC), the Ministry of Environment and Sustainable Development (Mades), and the Regulatory Entity of Sanitation Services (Erssan) to manage climate investments, control pollution, and improve environmental monitoring, the Paraguayan authorities noted.