World Bank: US$40 Million for Social Housing — 10,000 Low Income Families will benefit
WASHINGTON, — The World Bank Board of Directors (WB) approved a US$40 million loan today for the Social Macro Projects Program in Colombia, seeking to facilitate low income populations’ access to housing with all basic services and infrastructure.
This type of initiative is generally implemented by municipalities; however, this priority social housing program is being promoted and executed by the national government.
The program will help implement between four and six macro projects in several cities around the country through a public-private partnership authorizing construction sites and household construction.
The project will finance public-private partnerships that require the intervention of the public sector for on-site real state integration, the establishment of urban regulations for land use and exploitation and the organization of additional financing schemes. The participation of the private sector is present in the establishment of the real estate trust fund, in project financing and the contracting of a private party for its execution.
This public-private co-responsibility model allows builders to assume part of the project’s risks (financial and building, among others) while boosting that sector’s future management capacity through the experience generated by this program.
“I am extremely pleased for the support of the World Bank that will help Colombia to address the housing problem facing thousands of Colombian families who are in need for a place to live.
We are making the greatest effort possible to provide timely solutions to low-income households, especially those located in areas where risks cannot be mitigated. Support from this loan will support housing development for six macroproyects, which account for about 8,000 to 10,000 homes and aims to improve the living standards for those most in need,” said Beatriz Uribe, Minister for the Environment, Housing and Land Development (MAVDT).
The initiative seeks the following objectives:
· Build priority social housing, with quality and dignity;
· Develop infrastructure (water supply and sanitation, drainage, transportation and mobility structures, gas and energy networks) for low income social sectors;
· Improve the government’s institutional capacity in land management for low income households; and
· Produce a series of studies to increase the management and executive capacity of the building sector in Colombia.
“With this project we support the Colombian government’s efforts to reduce the national housing deficit through the development of an innovative public-private financial management model. We will continue to work for those who need it the most,” said Gloria Grandolini, World Bank Director for Colombia and Mexico.
The Program will be implemented between 2011 and 2014. It involves a mix of implementation, monitoring and supervisory activities concentrated nationally at the Ministry for the Environment, Housing and Land Development (MAVDT) and the National Housing Fund (FONVIVIENDA). The MAVDT will be the recipient and executor of the loan through FONVIVIENDA, a body attached to the MAVDT.
The total cost of the program is estimated at US$74.7 million, US$40 million of which will be financed by the World Bank and the remainder by project developers.
This is a US dollar-denominated loan, with a fixed margin interest rate + LIBOR. The project is expected to end December 31st, 2014.
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