Funds will be used to repair malfunctioning and abandoned wastewater treatment plants along the Caroni river basin between Port-of-Spain and Arima in the east of the country, the bank said in a release.
Work will involve integrating seven treatment plants into larger treatment systems and overhauling four of the plants. The work is expected to "drastically reduce" levels of contamination in local rivers and streams, IDB said.
WASA will install 13km of sewers and pipes as part of the wastewater treatment improvements.
IDB will allocate funds to train WASA employees to operate and maintain the plants. The project also aims to reduce the authority's organizational expenses.
The 25-year loan has a five-year grace period and Libor-based variable interest rate.