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Iran: World Bank To Support Urban Upgrading, Water Supply And Sanitation

Press Release No:2004/379/MNA
Media Contact:
In Washington: Shaha Riza 1 (202) 458-1592

Washington, May 26 2004 -The World Bank’s Board of Directors this week approved a total of $359 million in loans for two projects aimed at helping the Government of Iran improve housing conditions for poor and middle-income urban neighborhoods as well as expand access to clean water and coverage of sanitation services in the two large cities of Ahwaz and Shiraz.

The Water Supply and Sanitation Project ($279 million) supports the initial phase of  the Government of Iran’s long-term development plans to expand water and wastewater facilities in Ahwaz and Shiraz by 2027.  About 96 percent of the Iran’s urban population is connected to public water supplies.  However, only about 16 percent is connected to sanitary public sewerage, and only part of the collected sewage is treated before disposal.  The bulk of sewage is discharged untreated, polluting groundwater and posing a risk to public health.


The five-year project will benefit some 2.4 million people living in Ahwaz and Shiraz, a proportion of whom are poor.  It will significantly increase coverage of sanitation services as well as improve the quality of water supply in the two cities, with substantial hygiene and health benefits to their population. The Project will upgrade existing water treatment plants, provide additional treatment, and improve water networks in both cities. Wastewater treatment works will include the rehabilitation, improvement and expansion of wastewater facilities and   wastewater collection systems. The project will also strengthen the capacity of sector institutions, particularly  the Ahwaz and Shiraz Water and Wastewater companies and assist them in improving their efficiency and financial autonomy.


The Urban Upgrading and Housing Reform Project ($80 million) is the first phase of a twelve year lending program ($264 million) which aims at supporting the Government of Iran’s housing sector goals as spelled out in its Third and Fourth Five-Year Development Plans.


During the last decade, Iran has experienced rapid urban growth resulting in the proliferation of infomral settlements.  Both central and local governments were unable to provide basic services to these areas that represent around 20-30% of the urban population and that are home to the poorest segments of the society.


Furthermore, Iran’s housing sector is hindered by an inefficient system of housing subsidies, an inactive land market controlled largely by the government, poor urban planning and constrained role of local governments. Also, being among the most earthquake-prone countries in the world, Iran is at risk of facing large and unexpected housing loss.


To help the Government of Iran achieve its housing sector goals, the Project will launch a nationwide urban upgrading program in major under-serviced settlements in up to five provincial capital cities. The Project will also initiate housing sector reforms through technical assistance in areas such as: land management, housing finance, housing subsidies and information aiming at improving the affordability of housing in Iran.


The two projects fall in line with the World Bank’s interim strategy for Iran which focuses on extending assistance to priority areas  including low-income housing, water and sanitation and urban upgrading and community-based infrastructure, among others.  The Bank is currently implementing four projects in Iran in healthcare and nutrition, sewerage in Tehran, environmental management, and emergency earthquake recovery.


For more information on the World Bank’s activities in Iran, please visit:




For more information, please visit the Projects website.

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