Nicaragua/WB: New 2013-2017 Strategy Promotes Social Well-Being and Greater Productivity

November 13, 2012

WASHINGTON, November 14, 2012 The World Bank (WB) Board of Directors approved a new 2013-2017 Strategic Partnership with Nicaragua yesterdayday, focusing on improving the social well-being of the most vulnerable and increasing the country’s productivity and competitiveness. In addition to interest-free loans and donations from the International Development Association (IDA) for investments, the World Bank Group (WBG) program in Nicaragua includes South-South exchanges, technical assistance and analytical work.

The new strategy contemplates:

  • Expanding the coverage and quality of preschool, primary and secondary education;
  • Improve maternal and child health indicators;
  • Expand access to water and sanitation services; and
  • Promote efficiency and transparency in social investment.

It also includes assistance to:

  • Improve transportation infrastructure and energy generation;
  • Increase productivity and diversify exports;
  • Improve investment climate through business facilitation;
  • Strengthen land administration; and
  • Increase access to financial services.

“The new Strategic Partnership with the World Bank supports the priorities set by the National Human Development Plan to benefit the most vulnerable population with increased access to educational and health services, as well as improving infrastructure and stimulating private investment. This support is key to the National Reconciliation and Unity Government’s goal of providing more opportunities for all Nicaraguans,” said Nicaraguan Finance Minister Ivan Acosta.

The 2013-2017 Strategy contemplates interest-free loans and donations totaling around US$50 to US$60 million per year. The financing available to the country during 2016 and 2017 will depend on the Seventeenth Replenishment of IDA (IDA-17) to be celebrated in 2013.

Additionally, the International Finance Corporation (IFC), the WBG private-sector arm, will support the energy and financial sectors with financing, while the Multilateral Investment Guarantee Agency (MIGA) will consider opportunities to support foreign direct investment in energy, agribusiness and finances with risk guarantees.

“With the new Strategic Partnership, the World Bank renews its commitment to place its knowledge, financing and technical assistance services at the service of Nicaragua’s priorities. The World Bank places particular emphasis on measuring and publicizing the results of the public projects and programs it supports, as well as in strengthening cooperation ties and dialogue with different sectors in society,” said Camille Nuamah, World Bank Representative in Nicaragua.

The 2013-2017 Strategy has two strategic objectives with clear performance indicators:

1) Increasing social well-being by improving access to quality basic services.

  • Expand preschool education, increasing coverage from 55 to 65 percent nationally by 2017, and increasing primary school graduation rates from 75 percent in 2010 to 85 percent by 2017.
  • Improve the quality of education at the primary and secondary level so that third grade students improve their math and Spanish language skills by 2017.
  • Increase the percentage of births in health institutions from 72 percent in 2011 to 86 percent by 2014; increase under-one year old immunization rates from 88 percent in 2011 to 98 percent in 2015; and support the establishment of a national strategy to close the gap between urban and rural areas in terms of access to drinking water and sanitation services.

2) Increase income levels by strengthening competitiveness and diversifying exports.

  • Improve road conditions to facilitate transportation and trade logistics, and increase the generation of renewable energy by 100 MW by 2017.
  • Promote pilot initiatives to improve small farmer productivity and diversify export products.
  • Improve the investment climate through a reduction in the time it takes to register property.
  • Increase access to financial services in the microcredit, trade and housing sectors.

New GEF Project and Additional Financing for Rural Areas Impacted by Felix

The WB Board of Directors also approved a project yesterday supported by a US$6 million donation from the Global Environment Facility (GEF)-managed Special Climate Change Fund to support climate change adaptation at the national level via investments and protection for water sources in four pilot municipalities.

The “Climate Change Adaptation in the Water and Sanitation Sector” Project will benefit the municipalities of Juigalpa, Murra, San Ramon and San Juan de Limay, located in the Pacific region of Nicaragua. It will also help improve efficient water-use practices and protect water supply sources in those areas. Another component of the project will support the protection of coastal systems and drinking water systems in the Municipality of Corn Island in the Atlantic Ocean, in order to reduce its vulnerability to climate change and rises in sea levels.

Moreover, the WB Board of Directors approved an additional financing totaling US$5 million in non-reimbursable funds from the IDA for the “Hurricane Felix Recovery Project,” in order to continue with the reconstruction of social infrastructure and housing in the North Atlantic Autonomous Region (RAAN, in Spanish).

The “Hurricane Felix Recovery Project” is being implemented since 2008 to support rural communities in the RAAN impacted by this natural disaster in 2007. The project has benefited 3980 families with roof rehabilitation and 200 families with household reconstruction. This additional financing will be used to continue the construction and rehabilitation of community centers and health centers to offer their services to isolated communities.



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