WB/BRAZIL: Brazil is granted with three projects loan in the order of US$ 500 million

June 17, 2013

The State of São Paulo and the municipalities of Rio de Janeiro and Belo Horizonte will implement programs to promote social inclusion and improve services

WASHINGTON, June 17, 2013 – The World Bank Board of Directors has approved three loans for  Brazil, that together reach the amount of US$500 million. The State of São Paulo and the municipalities of Rio de Janeiro and Belo Horizonte are the recipients of the loans and will implement special programs to promote sustainable social inclusion and improve services delivery, especially for the poorest population.

The São Paulo State Sustainable Transport Project will contribute to improve logistics and transport safety, while enhancing capacity in environmental and disaster risk management, in the State, Brazil’s industrial center and most populous, with 40 million people. While São Paulo’s transport infrastructure is among the best in Brazil, it requires continuous investment to foster Brazil’s competitiveness. The Project will support the State’s efforts to foster multimodality and increase efficiency in the management of the transport system, notably with improved planning and the introduction of performance based contracts in road maintenance.

"This is a state geographically very extensive, with more than 258,000 km ². Given that, it is necessary to strengthen this partnership in order to invest more in transport and logistics system. And that means more decentralized development, spread across different regions, and more security to prevent environmental disasters and road accidents, which are now the leading cause of mortality in the world.”, said the State of São Paulo governor, Geraldo Alckmin..

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. Development in the capital of the State of Minas Gerais has been mixed. While economic growth and municipal services have improved, inequality and informal settlements have increased. 

Proactive, integrated urban development strategies are urgently needed to address social exclusion, and create effective and long-term sustainable governance to benefit all residents. 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.”

Twice the size of Uruguay, the city of Rio de Janeiro represents the second largest in population in Brazil. Despite its high US$108 billion gross domestic product, the city still suffers from high levels of social and economic inequality.

In the past decade, fiscal and administrative reforms have started to change this scenario. The Family Health Strategy has expanded access to care, new education programs in high risk areas have, the new Police Peacekeeping Units (UPPs), and the accompanying Social UPPs, have worked to integrate the poor and developed areas of the city.  The Rio de Janeiro Strengthening Public Sector Management Technical Assistance Project , a US$16.2 million loan will support an improved service delivery in the Municipality of Rio de Janeiro.

“Since 2009, Rio de Janeiro has resumed economic growth and is experiencing renewed prosperity.”, said Eduardo Paes, Mayor of Rio de Janeiro Municipality. “This project will allow us to consolidate the reforms that have been carried out during these four years, aimed at achieving excellence in areas such as health, education and security.”

This new development phase has been recognized worldwide, particularly through the election of Rio de Janeiro as a host of major international events, such as the 2016 Olympic Games. The consolidation of economic and social improvements through strengthened service delivery is thus fundamental.

“These partnerships will support fiscal and public sector reforms along with infrastructure investments, which are critical to sustaining the progress that both cities and the State of São Paulo have made in improving services for the poor ”, said Deborah L. Wetzel, World Bank director for Brazil.

All three loans from the International Bank for Reconstruction and Development (IBRD) are guaranteed by the Federative Republic of Brazil.

The São Paulo State Sustainable Transport Project has a final maturity of 30 years, with a five year grace period; the Belo Horizonte Urban Inclusive Development Policy Loan has a final maturity of 25.5 years, with a 0.5 year grace period; and the Rio de Janeiro Strengthening Public Sector Management Technical Assistance Project has a final maturity of 20 years, with a 4 year grace period.

Media Contacts
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