UNITED NATIONS - / MaximsNews Network / 4 July 2008 -- The IFC, a member of the World Bank Group, has signed a risk-sharing agreement with four local financial institutions to support a priority sewerage investment involving the municipal water supply/sanitation and electricity distribution utility (RADEEJ) serving the city of El Jadida, Morocco as well as surrounding regions.

As the result of the IFC’s involvement with the quartet of local banks, the maturity of the US40 million loan to RADEEJ has been increased from a 10-year tenor to a 15-year tenor.

Via the IFC’s investment of US$20.0 million in the form of a sub-national guarantee, the local utility will be able to rehabilitate and expand the sewerage collection infrastructure and connect poorer neighborhoods to the network for the first time. 

The local bank loan will also help build new treatment and discharge facilities that will bring El Jadida and the surrounding communities up to Morocco’s national standards. 

Ultimately, it will help reduce health hazards caused by the discharge of untreated sewage that affects both surface and coastal waters and pollutes beaches.

And the investment will also seek to improve the living standards of the local population while supporting the development of tourism and other local industries.

The loan is part of a larger US$71.5 million investment program focused on sanitation infrastructure that is being carried out under Morocco’s National Sanitation plan. 

At the more macro-level, it is estimated that Morocco needs US$4-5 billion in investment when it comes to sewerage and wastewater treatment.

This World Bank-IFC agreement will help serve as a catalyst/an incentive for other local water utilities to improve their financial and operating performance in order to better attract local commercial financing.  

And the World Bank-IFC Subnational Finance Department has already begun dialogues with a handful of other Moroccan utilities for similar projects/loan guarantee agreements.

The investment/sub-sovereign loan guarantee represents the first of its kind for the World Bank-IFC in the Middle East and North Africa region. 

It is part of a broader World Bank Group strategy to assist the Moroccan authorities in facilitating a disciplined transition by municipalities and their public enterprises to market-based financing without the use of sovereign guarantees.

The loan guarantee was issued through the World Bank Group’s SubNational Finance Department – a recently formed collaboration between the World Bank and the IFC.

Labels: United Nations, U.N., MaximsNews WATER, water, infrastructure, investment, Morocco, IFC, World Bank, sewerage, municipal, water utility, Kathy Shandling, international development, environment, water news, water sustainability, water resource, water management, global water crisis, sustainable development

 

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