BOLIVIA/WB: Electricity for 27 Thousand Homes, 130 Schools and Rural Health Care Centers

May 27, 2014

The World Bank, the Bolivian Government and the Departments of Potosi and Chuquisaca Partner for Development of Neglected Region

WASHINGTON, DC, May 27th, 2014 – The World Bank (WB) Board of Executive Directors approved US$50 million in financing today for a rural electrification program that will provide electricity and domestic photovoltaic solar systems to 27 thousand homes, 130 schools and health care centers in Potosi and Chuquisaca Departments of Bolivia’s southwest.

“We have negotiated with the World Bank to obtain the financing for the second phase of the Decentralized Infrastructure for Rural Transformation II Project (IDRT II, in Spanish), which falls under the 2025 Patriotic Agenda for the universalization of basic services as a human right and as part of the fight against poverty,” said Hortensia Jimenez, Deputy Minister of Electricity and Alternative Energy. “Initially, we have included the Departments of Chuquisaca and Potosi, taking into account the twin criteria of higher poverty rates and lower electricity coverage, thus benefiting the most vulnerable sectors in those rural areas.”

The Ministry of Hydrocarbons and Energy will be charged with coordinating and executing the IDTR II under a decentralized national framework where work will be shared with the Governorships of Potosi and Chuquisaca. Meanwhile, municipalities will identify demand, support the design of network extension sub-projects alongside distribution companies, and will also be responsible for the operation and maintenance of photovoltaic solar systems, thus contributing to the sustainability of these investments.

The World Bank has supported Bolivia’s electrification programs since 2003 with operations such as the Decentralized Infrastructure for Rural Transformation Project, which brought electricity to more than 30 thousand families, and the Decentralized Electricity for Universal Access Project, which benefited more than 12 thousand homes with the support of the Global Partnership on Output-Based Aid (GPOBA).

The objectives of the new project are fully aligned with the 2012-2015 World Bank Strategic Partnership with Bolivia in two of its main pillars: Sustainable productive development and human development and access to basic services.

“Access to modern electricity services for 27 thousand homes will have a direct and positive impact on poverty reduction and increased social inclusion. Electricity will improve their well-being and generate better opportunities for economic and social development,” maintained the World Bank Resident Representative in Bolivia, Faris Hadad-Zervos.

According to the 2012 Census, the country’s electricity coverage stood at 80.95 percent, albeit with notable variations between regions. A significant portion of the unattended population is concentrated in the poorest departments: In Chuquisaca, 46 thousand homes still lack access, representing 31 percent of all housing units; 7,100 homes in Pando, or 28 percent of all homes; 16,600 in Beni, or 18 percent; and 71,300 homes in Potosi, or 30 percent. Chuquisaca and Potosi account for the greatest percentage of Bolivian homes without electricity, a total of 117 thousand homes between both or 30 percent of the total population.

The project will cost a total of US$59 million. The US$50 million from the World Bank will be complemented with a US$5 million contribution in the form of counterparty financing from the Governorships and Municipalities of Potosi and Chuquisaca, as well as a US$4 million contribution from local beneficiaries. The International Development Association loan has a 25-year maturity period and a 5-year grace period.

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