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IDB has approved a US$150mn loan to Panama to finance the first phase of a sanitation program in districts Arraiján and La Chorera.
The program to improve sanitation and reduce water pollution will extend the coverage of current sewage and wastewater collection and treatment systems.
The project is managed by Panama's health ministry and will require over US$640mn in total, some US$250mn of which will be financed by loans from multilaterals such as the Latin America development bank CAF, the European Investment Bank (EIB) and the Central American Bank for Economic Integration, as well as IDB.
The IDB loan will be used to fund the construction of a wastewater treatment plant and to extend the sewer system in the two districts in Panamá Oeste province, as well as to repair the current wastewater collection units and improve the existing sewer network.
According to IDB, the program's area covers 308km2 and the work will benefit over 188,000 people in the first stage.
Works include the construction of 324km of sewer pipelines, 16,800 new residential connections, and 65km of sewer mains serving 49,000 households which currently discharge their wastewater into rivers. It also entails the construction of a 6.6km tunnel to transport wastewater to the Caimito sewage treatment plant.
The work aims to replicate the Panama Bay sanitation program, which has been implemented by the government with support from IDB for the past 10 years in order to improve sanitation in Panama City and the area surrounding Panama Bay.
In 2015, the IDB earmarked a US$2bn four-year credit line for Panama, with around 25% of the total going on sanitation services, bank representatives said at the time.