WASHINGTON, July 24, 2008 – The World Bank approved two loans to the Brazilian cities of Bagé and Uruguaiana in Brazil’s southern State of Rio Grande do Sul. The loans for US$6.6 million and US$6.8 million, respectively, support growth, income and job generation, and infrastructure services in the two cities. These are the second and third loans of the Rio Grande do Sul Integrated Municipal Development Program, totaling US$66 million in loans for five largest cities in the southern half of the State. The first loan, to Pelotas, was approved in January 2008, and loans for Rio Grande and Santa Maria are expected for the next few months. The five cities in the program are the main economic centers the southern half of the State of Rio Grande do Sul, an area that suffers from relatively high levels of poverty and economic stagnation. The region contains 25 percent of the population but only 19 percent of the GNP of the state. The program aims to boost city and regional economic competitiveness and to strengthen municipal capacity to generate income and jobs, while improving urban infrastructure services important for social and economic development, such as sanitation and transport, with long term fiscal and environmental sustainability. “These five cities are the economic engines of the region. The program will help them work together and share innovative methods and experiences to boost economic development,” said John Briscoe, World Bank Director for Brazil. Each of the five projects has three basic components: - Strengthening of municipal capacity to plan, implement, finance, monitor and evaluate infrastructure investments and local development initiatives.
- Income and employment generation. Support for local initiatives such as incentives for formal job creation; access to microcredit; creation of appropriate areas for business development, training and capacity building.
- Improvements to infrastructure services. Support municipal initiatives to expand and improve basic urban infrastructure provision in an efficient and sustainable manner.
Specifically, the loans to Bagé and Uruguaiana will support: | Bagé | Uruguaiana | Municipal Strengthening | Water and sanitation master plan, geo-reference system and user cadastre | Modernization of Public Services | Income and Employment Generation | Capacity building and micro-credit program for micro-enterprises | Capacity building and micro-credit program for micro-enterprises | Support to small-scale fruit and vegetable farmers in rural areas | Community vegetable gardens and support to rural production | Infrastructure Service Improvements | Rehabilitation of road infrastructure and urban landscaping | Rehabilitation of urban road infrastructure and urban landscaping | Expansion of urban water supply system and waste water network and treatment | Integrated municipal solid waste management and socio-environmental education | Sewerage and drainage systems in low income neighborhoods |
According to Marcos Thadeu Abicalil, World Bank Task Manager for the project, "The Bank is proud to be a partner to help unleash the region’s economic and social development potential. We would like to compliment the Governments of Bagé and Uruguaiana for their strong commitment and the priority given to the project.” These fixed-spread loans from the International Bank for Reconstruction and Development (IBRD) to the Municipalities of Bagé and Uruguaiana are guaranteed by the Federative Republic of Brazil and have a total term of 20 years, including a five-year grace period. - | 
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