Reimbursable Cooperation

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

Reimbursable Cooperation Modality

Reimbursable cooperation makes it possible to offer credits under special financial conditions to promote countries’ development. 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 financing new projects or second phases of Water Fund programs. In fact, 70% of its reimbursable operations have been aimed at expanding access to water and sanitation, mainly in Latin America and the Caribbean. These interventions include those conducted in Bolivia, Ecuador, Panama, and Paraguay, detailed below.

In most cases, this funding is supplemented by grants directly from the FCAS or through the European Union’s LAIF mechanism to extend projects to the most disadvantaged populations.

Operations

Bolivia
- 25.6 million from FONPRODE to co-finance the Integrated Water Management in Urban Areas Program (GIAAU), in which the EU Delegated Cooperation, the Water Fund, and other donors are also participating. (See Delegated Cooperation section).
Ecuador
In Ecuador, there are two programs with reimbursable cooperation:
- Credit operation for the Autonomous Decentralized Municipal Government of the Canton Portoviejo (GADMCP) to co-finance the Drinking Water and Sewerage Program of Canton Portoviejo. In this operation, FONPRODE contributes 15.45 million euro of credit to the joint program (see section on Delegated Cooperation).
- Drinking Water and Sewerage Program in Quito. This initiative aims to improve and expand the drinking water and sewerage systems in the country’s capital and comprises a joint loan operation with Metropolitan Public Company of Drinking Water and Sanitation of Quito. It makes up a total of 217.1 million euro, of which FONPRODE will contribute 36 million euro in the form of a loan, the Inter-American Development Bank 70.6 million euro, and the executing entity, which is the Metropolitan Public Company of Drinking Water and Sanitation of Quito, another 85.8 million euros
Panama
- Sanitation Program for the districts of Arraiján and La Chorrera. Arraiján and La Chorrera (DACH) districts, located about 35 km from Panama City, have experienced extraordinary population growth in recent years, reaching almost half a million people. Various interventions have been carried out in the area, but sanitation has historically been neglected, resulting in less than 40% of the population having sanitary sewerage. This is why a decision was made to launch this program, a broad initiative 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). FONPRODE, for its part, is providing a loan of up to US$50 million, which would exclusively finance the wastewater treatment plant planned under the project. The IADB is providing US$25 million, and the other entities are contributing US$200 million. In this operation, the Water Fund does not offer financing. Still, the Spanish Technical Cooperation Office in Panama and the Water Fund itself are conducting important technical cooperation work to support and promote the project, thanks to their experience in water and sanitation in the region
Paraguay
- Since 2020, a reimbursable cooperation is underway to co-finance, together with the IADB, the Drinking Water and Sanitation Project for Small Cities and Rural and Indigenous Communities. The program has a budget of US$60 million, of which US$20 million is provided by FONPRODE through a loan. This operation does not have associated funding from the Water Fund. Still, it is closely related to it as it is proposed as a continuation of the PRY-011-M program (Drinking Water and Sanitation Program for Rural and Indigenous Communities (PAYSRI), which ended in 2018, and the funding orientation is focused on the rural area. It is estimated that the program will 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 Basin. This program combines reimbursable cooperation (FONPRODE, which provides a credit of US$60 million, and the IADB another US$105 million), Delegated Cooperation (10 million euro from the EU), and donations from the FCAS -through Technical Cooperation carried out by FECASALC-. In June 2022, Spain and Paraguay signed a credit agreement to implement the project’s financing.
Related News:

AECID financiará en Paraguay un proyecto para facilitar agua y saneamiento a unas 450.000 personas

Con un coste total de 165 millones de dólares estadounidenses (154,3 millones de euros), el “Proyecto de Agua Potable y Saneamiento para el Área Metropolitana de Asunción – Cuenca Lambaré” será cofinanciado por la Cooperación Española a través del FONPRODE, con 60 MUSD (56,1 M€), y el Banco Interamericano de Desarrollo, con 105 MUSD (98,2 M€).

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