The Inter-American Development Bank has approved a US$ 30 million (EUR 22.6 million) loan to extend a programme to decentralise water and sanitation services in municipalities in Honduras.

The financing will strengthen municipalities that take over services and finance investments to set up local service companies and expand water and sanitation networks.

The IDB has also supported the establishment of a specialised Municipal Development Fund (FOMUNDE) to support water and sanitation and other projects in 21 municipalities.

The programme will also finance studies for transferring Tegucigalpa's water and sanitation systems from the SANAA state utility to the Municipality.

Decentralised services may be run directly by municipalities or by public-private companies established by local government. In both cases, municipalities are responsible for the financial, operational and environmental sustainability of services and for community participation in decisions concerning reforms.

Contact: Peter Bate, IDB, USA, peterb@iadb.org

Source: Inter-American Development Bank, 23 Oct 2006

Tags: governance, urban wash