Fund extends 400 mln birr for six towns’ potable water projects
The Water Resources Development Fund (WRDF) signed a financing of 400 million birr potable water project development with six new micro-towns targeted to reach some 81,000 beneficiaries.
Securing finances from the World Bank Group (WBG), the European Investment Bank (EIB), the French Development Agency (AFD) and the Italian Development Agency (AICS), WRDF has been able to reach small and rural towns that are facing shortage of potable water services. Last year alone the WBG has extended USD 450 million.
Signing the agreements with representatives of water services heads and regional authorities early this week, Wanna Wake, director general of WRDF said that loan for 400 million birr has been extended to the towns.
WRDF has arranged a 260 million birr or 60 percent direct loan contribution out of the 400 million birr credit, while the rest of the money will be acquired from the contribution of the recipient towns. Hence, five small towns from the Oromia Regional State and one from the Southern Regional State have agreed terms and finalize the water projects within two years.
Last year during an interview with The Reporter, Wanna said that most of the loan money will be put aside for projects that concentrate on the treatment of waste water in 22 cities including Addis Ababa. Hence, 80 percent of the 450 million birr is expected to be channeled to these cities for waste water treatment projects.
In addition to the six towns, so far, the state-run WRDF has financed 89 towns with eight billion birr soft loans. The beneficiary towns will be required to submit a thoroughly detailed project proposal and a guarantee document from the respective regional government, which will be issued on their behalf. According to Wanna, the documents serve as collaterals to avoid risks of defaults and maintain periodic repayments.
By the end of 2020, the Second Growth and Transformation Plan (GTP II) will conclude and the fund will be able to have financed safe water projects and sanitations worth ten billion birr. The loans WRDF extends to regional towns have extended maturities that will likely run for 20 to 40 years with three to five percent interest rates per year.
Established 15 years ago, WRDF has been able to attract multilateral and bilateral financiers, the African Development Bank (AfDB) and UNICEF which have extended millions of dollars to the water and sanitary projects WRDF finances.