Reimbursable Cooperation

FONPRODE complements the FCAS portfolio by financing new projects or second phases

Modality of Reimbursable Cooperation

Reimbursable cooperation is the modality by which a state or financial entity provides credits to other states with special financial conditions and with the objective of funding projects that promote the development of the countries. In the case of Spanish Cooperation, this type of action is carried out through FONPRODE, the Development Promotion Fund.

In the water and sanitation sector, FONPRODE complements the FCAS portfolio by funding new projects or second phases of Water Fund programmes. At present, the Water Fund and FONPRODE have been making progress in the joint work of identifying reimbursable cooperation programmes in the water and sanitation sector that could be co-funded by the Inter-American Development Bank (IADB) or the LAIF tool and FONPRODE, following the same guidelines and approaches as the Fund.

Currently, 70% of FONPRODE’s sovereign guarantee operations in Latin America and the Caribbean are in Water and Sanitation. These include those in Bolivia, Ecuador, Panama and Paraguay, which are detailed below. In all of them, the contributions are recorded in dollars, as this is how credit operations of this type are accounted for:

Operations

Bolivia
- In Bolivia, a credit operation is underway to co-fund the Integrated Water Management in Urban Areas Programme (GIAAU). This operation is supported by a 3-million-euro Water Fund donation (through the BOL-007-B programme) and a donation of 15 million euros from the European Union. In addition, a combined operation is being prepared in which FONPRODE would provide approximately 25.6 million euros (30 million US dollars) and the IADB will contribute a further 85.5 million euros (100 million US dollars) in credit. The programme commenced implementation in July 2021 and is expected to directly benefit approximately 515,000 households with new or improved access to safe drinking water and approximately 16,000 households with access to sanitation.
Related News:

Spanish Cooperation and the European Union, Working With Bolivia to Guarantee the Right to Water and Sanitation

El Consejo de Ministros aprobó ayer la subvención plurianual de 13.848.692 euros para llevar a cabo el Programa de Gestión Integral del Agua en Áreas Urbanas en Bolivia a través del Ministerio de Medio Ambiente y Agua (MMAYA) del país andino.

More information here (Spanish) >>
Ecuador
- Credit operation to the Autonomous Decentralised Municipal Government of the Portoviejo District (GADMCP) to co-fund the Drinking Water and Sewage Programme of the Portoviejo District. A number of international actors are involved in this 114-million-euro operation: FONPRODE is providing 15.45 million euros in credit, the IADB is contributing 25 million euros, the European Investment Bank is contributing 55.4 million euros and local contributions amount to 6.39 million US dollars. To ensure coverage in rural areas, the programme will be complemented by a LAIF (European Commission’s Latin America Investment Facility) donation of 10 million euros, a donation of 2.3 million euros from the Cooperation Fund for Water and Sanitation and another of 0.57 million euros from the local government of Portoviejo.
- Drinking Water and Sanitation Project in Quito. This initiative consists of a joint credit operation to the Quito Metropolitan Public Company for Drinking Water and Sanitation. It represents a total programme of 217.1 million US dollars, of which FONPRODE contributes 40 million US dollars, the Inter-American Development Bank contributes 87 million US dollars and local contributions amount to 90.1 million US dollars.
Panama
- Sanitation Programme for the Arraiján and La Chorrera Districts. This initiative is part of a large project with loans from the Inter-American Development Bank (IADB), the CAF-Development Bank of Latin America, the Central American Integration Bank (CABEI) and the European Investment Bank (EIB). Initially, FONPRODE is providing a loan of up to 50 million US dollars, which would exclusively fund the wastewater treatment plant planned under the project; the IADB is providing 25 million US dollarsand the other entities are contributing 200 million US dollars. The Water Fund does not provide funding for this operation, but the Spanish Technical Cooperation Office in Panama and the Water Fund itself are doing important work to support and promote the project due to their experience in water and sanitation in the region.
Paraguay
- Since 2020, a reimbursable cooperation has been in place with the IADB to co-fund the Drinking Water and Sanitation Project for Small Towns and Rural and Indigenous Communities. The programme has a total budget of 60 million US dollars, of which 20 million US dollarsis provided by FONPRODE by means of a credit. This operation does not receive funding from the Water Fund, but is closely related to it as it is a continuation of the PRY-011-M programme (Drinking Water and Sanitation Programme for Rural and Indigenous Communities (PAYSRI)), which ended in 2018, and the funding is focused on rural areas. The programme is estimated to benefit a total of 131,500 people in eight small towns (53,000 inhabitants), 85 rural communities (75,000 inhabitants) and 30 indigenous communities (3,500 inhabitants).
- Drinking Water and Sanitation Project for the Metropolitan Area of Asunción, Lambaré River Basin. This programme does receive a specific donation from the FCAS, in the form of Technical Cooperation by FECASALC, and another 10.5 million euros from the European Union, as well as contributions from other international funders. FONPRODE is providing a loan of 60 million US dollars, and the IADB is expected to provide 105 million US dollars. As of December 2021, the FONPRODE and IADB credits were pending approval by the Paraguayan Congress. The programme is in the design phase and will be implemented in the coming years.

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