The Inter-American Development Bank (IDB) has approved a $250 million loan to support Guatemala in improving the environment and quality of life in the Motagua River Basin. The funding will finance a program aimed at expanding solid-waste collection and disposal, increasing treatment of effluents and discharges, strengthening water quality monitoring and control at the national level, and enhancing local management of sanitation and solid-waste services.
The program is expected to directly benefit 166,000 households with improved access to sanitation and 225,000 households with proper solid-waste management. It will also improve the quality of effluents discharged into the watershed, promote a circular economy for solid waste, and increase formal employment among recyclers, with a focus on women.
The Motagua River Basin, the largest watershed in Guatemala, spans 96 municipalities across 14 departments and is home to roughly four million people. The basin currently faces challenges including solid and liquid waste pollution, deforestation, forest fires, decreased water flow, and erosion, some of which also affect neighboring areas in Honduras, highlighting the need for coordinated binational efforts.
Achieving proper solid waste management in the basin is estimated to require at least $420 million in investment, while ensuring safe sanitation for the population by 2035 is projected to require an additional $2.14 billion. The current operation represents the first of several planned interventions, including the construction of sanitation systems in the northern sub-basin of the Las Vacas River within the Guatemala City Metropolitan Area, as well as integrated solid waste management centers and municipal composting units.
The program also includes measures to strengthen institutional capacities and improve the integrated management of solid waste, sanitation, and water resources. Support will be provided for modernizing the Ministry of Environment and Natural Resources and the Municipal Development Institute, enhancing their ability to oversee and manage environmental initiatives effectively.
The $250 million loan features a 22.5-year repayment term, an eight-year grace period, and an interest rate linked to the Secured Overnight Financing Rate (SOFR), providing long-term financial support for sustainable environmental and social improvements in the Motagua River Basin.
