WB/BRAZIL: Green Urban Development Program to Benefit 500,000 vulnerable people in Belo Horizonte

June 17, 2013

Partnership will promote integrated urban development, green growth and sustainable urban governance in the state capital of Minas Gerais

WASHINGTON, June 17th, 2013 – Half a million vulnerable residents of  the capital of Minas Gerais, in the South East of Brazil, will benefit from the Belo Horizonte Urban Inclusive Development Policy Loan a US$200 million loan to the Municipality of Belo Horizonte, approved by the Board of Directors of the World Bank. The initiative will support a sustainable urban development strategy aimed at reducing social vulnerability, 

“In the past years, Belo Horizonte has experienced increased economic growth, attracting a lot of workers to the city,” said Márcio Lacerda, Mayor of the Municipality of Belo Horizonte. ”However, despite our efforts to deliver better services, we have observed an increase of irregular housing. This partnership will be essential to increase the quality of life of the low income population and to promote sustainable and environmental friendly urban development.”

Development in Belo Horizonte has been mixed. While economic growth and municipal services have improved, inequality and informal settlements have increased.  Belo Horizonte has 2.4 million inhabitants living in 331.4 km2. Social and spatial exclusion have resulted from high levels of urbanization, a very high population density, less than optimal land use and inequality in land distribution. Proactive, integrated urban development strategies are urgently needed to address social exclusion, and create effective and long-term sustainable governance to benefit all residents.

This loan will support, Belo Horizonte’s efforts in addressing these challenges. Belo Horizonte has proposed new participatory decision-making mechanisms to foster citizen inclusion and ownership of budget allocations, policy decisions, and planning. The municipality also supports state-of-the-art resettlement policies and practices and is spearheading an innovative approach to reach the most vulnerable families.

“Belo Horizonte has been incorporating innovative instruments in matters of land use, management and urban planning to reduce social exclusion, improve service delivery and promote sustainable growth for the city,” said Deborah L. Wetzel, World Bank Director for Brazil.The World Bank will  support such a program through the implementation of pioneering reforms. Belo Horizonte has potential of converting into a ‘learning city’ for other major urban centers in Brazil and worldwide.

The project’s areas of focus are: 

  • Strengthen land management and planning.
  • Improve living conditions and inclusion of vulnerable and poor citizens.
  • Strengthen service delivery to all citizens.
  • Improve capacity in mitigation of climate change and green development.
  • Improve capacity in adaptation to climate change (disaster risk management).
  • Strengthen urban governance through results based management and participatory urban planning.
  • Strengthen long-term fiscal sustainability.

This one tranche loan from the International Bank for Reconstruction and Development (IBRD) to the City of Belo Horizonte is guaranteed by the Federative Republic of Brazil and has a final maturity of 25.5 years, with a 0.5 year grace period.

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