WASHINGTON, DC, June 10, 2010 — The World Bank’s (WB) Board of Executive Directors approved a US$450 million loan this Thursday to develop public policies aimed at supporting the Mexican government’s efforts of promoting the adaptation of its water sector to climate change.
The decrease in the availability of water, as well as its deteriorated quality are factors that affect growth and sustainable development. Climate change aggravates these two issues causing a disproportionate impact on the most vulnerable sectors of the population. World Bank research shows that reversing these effects demands water policies that are based on sound regulations, norms and solid financial mechanisms.
This loan seeks to support government implemented policies that will contribute to the country’s preparedness at the time of confronting the growing impact of climate change through programs implemented by the National Water Commission (CONAGUA, in Spanish). These programs will facilitate the integrated management of water resources and the establishment of regulatory and financial frameworks.
“The World Bank’s support and contribution will allow us to strengthen the Mexican government’s current and future activities aimed at confronting the challenges posed to the water sector by climate change. At the same time, it will help us to highlight the importance of this natural resource in the international context in view of the forthcoming COP 16. Water is a fundamental element for sustainable development and thus life. The Mexican government is working to guarantee nation-wide supply of water in sufficient quantity and quality, recognize its strategic value, use it efficiently, protect bodies of water, guarantee sustainable development and preserve the environment,” said José Luis Luege, General Director of CONAGUA.
The project will support public policies that have their origin in the National Water Program and the Special Climate Change Program (PECC, in Spanish). They both constitute policy tools that can be used to establish the adaptation agenda for the water sector. They include clear objectives in terms of water resource infrastructure and management, which are aimed at reducing the sector’s and society’s vulnerability to the effects of climate change.
“This loan will support government-set priorities for the water sector, in particular its adaptation to climate change. The country has long been implementing climate change policies aimed at confronting the negative effects it has had on the main economic sectors, thus consolidating its development,” said Gloria Grandolini, World Bank Director for Mexico and Colombia. “This project consolidates Mexico’s international leadership role in this field and establishes a damage control strategy for the water cycle. This is an effort that needs to be emphasized,” she emphasized.
Some of the expected results include:
- The development of management plans for the main aquifers;
- Improving the available information on the status of the country’s water resources;
- Increasing the productivity of irrigation programs; and
- Increasing the percentage of treated sewage from 36 to 60 percent.
The strategic partnership between Mexico and the World Bank on climate change issues started in the mid-90s and contemplates a comprehensive program of financial, knowledge and coordination services. As of today, the package includes 35 initiatives in loans, grants, reduction of GHG emissions-certificates and other financial instruments. This operation in particular will include a knowledge and coordination services package established in a technical consultancy program agreed with CONAGUA.
The organization responsible for the implementation of this loan is the Secretary of Finance and Public Credit, which in turn designated the National Savings and Financial Services Bank (BANSEFI, in Spanish) as the financial agent. This is a variable interest rate (6-Month LIBOR) loan, plus a variable margin, with a 18-year maturity period. The opening fee has been fixed at 0.25% of the total sum. The project is expected to end on December, 2012.