WASHINGTON, December 7th, 2007 — The World Bank’s Board of Directors approved a $15.3 million loan to the Government of Ecuador to improve irrigation systems and the Chambo and Chanchan-Chimbo roads, in Chimborazo province, with an aim to increase production by rural families and to improve market access.
The Project for Productive Investments in Chimborazo-Ecuador aims to expand the production and market value of the local peasants’ foodstuffs. It is estimated that at the end of the project around 17,500 families will add to their products’ value by 10% and that 15,000 rural families will increase their sales by 5%. The project also aims to increase irrigation efficiency by 30%, both in systems and farms and reduce travel time by 30% through the use of improved roads.
“I want to express my gratitude because a loan requested by responsible local authorities has been approved. The community will benefit and now they will have to make sure that the terms of the loan are executed adequately,” said Fausto Ortiz, Minister of Finance of Ecuador.
The project’s goals and objectives are consistent with Chimborazo province’s “Minga for our lives” development plan, which intends to concentrate development efforts on four pillars: strengthen the environment’s sustainable use; accelerate the local economy and its productivity; improve business processes and to set up a local plan to combat poverty.
“Equitable rural development is vital for Ecuador’s growth. This loan will support the existing provincial government’s efforts to improve living standards and productive processes of Chimborazo peasants, and maximize their contributions to the local economy”, said Carlos Felipe Jaramillo, World Bank Country Director for, Bolivia, Ecuador, Peru, and Venezuela.
Among other things, the project will support two key infrastructure designs that play an important role in the local rural economy’s development: improvement and rehabilitation of irrigation systems. Equally, it will rehabilitate the Riobamba-San Luis-Punín-Flores-Cebadas provincial road (approximately 20 miles long) and will optimize the Charicando-San Patricio-La Dolorosa road (15.7 miles long).
Investment in roads and irrigation systems will allow people from the local community better access to urban markets, to increase and diversify their production, particularly fodder, and in that way be able to satisfy the increasing demand in cities for products like milk and meat.
The $15.3 million International Bank for Reconstruction and Development (IBRD) Loan for Productive Investments in Chimborazo has a reimbursement period of 19 years with a 2-year grace period.