Media Contacts: Embassy of Nicaragua: Federico Arce (202) 939-6570 federico.arce@embanic.org World Bank In Washington: Stevan Jackson (202) 458-5054 sjackson@worldbank.org In Managua: Maria Teresa Norori (505)-270-0000 ext. 436 mnorori@worldbank.org WASHINGTON, DC, July 25, 2008 – Nicaraguan Minister of Finance Alberto Guevara and World Bank Country Director for Central America Laura Frigenti signed two loan agreements today which will support the country’s efforts to improve water and sanitation in rural areas and to enhance the business climate for micro, small and medium enterprises. The two agreements, which amount to $40 million in credits from the International Development Association (IDA), were signed at the Nicaraguan Embassy. The first of the two agreements signed is for a $20 million zero-interest credit to support the government of Nicaragua to improve water and sanitation services in rural areas. The second agreement is for a $20 million zero-interest credit to enhance the competitiveness of micro, small, and medium enterprises (MSMEs) and the business climate that affects those firms. “The financing provided by the World Bank to support micro, small and medium enterprises is essential to our economy and will help provide for a healthier business climate,” said Alberto Guevara, Nicaragua Minister of Finance at the signing ceremony. “Improving basic water and sanitation services for people in rural areas is one of the key aims of Nicaragua’s National Development Plan. The program supported by this new financing will help, improve access to water services, and will target rural and indigenous communities. In particular, this program is expected to have a positive impact on women and children because they traditionally are tasked with fetching water from and washing clothes and children in far-located water sources,” Minister Guevara added. The Nicaragua Rural Water and Sanitation Project seeks to increase access by project beneficiaries to sustainable water and sanitation services in the country’s two autonomous regions on the Atlantic Coast, RAAS (Región Autónoma del Atlántico Sur) and RAAN (Región Autónoma del Atlántico Norte). Along with the Alto Coco and Bocay region, these have the lowest levels of water and sanitation coverage in the country. They also have a large indigenous population. The plan outlines the government’s plan to promote the sustainability of water and sanitation infrastructure and service expansion in rural areas through community participation and education, and the coordination of agencies such as Fondo de Inversión Social de Emergencia (FISE) and the municipalities. The Nicaragua Micro, Small, and Medium Enterprise Development (MSMEs) will be implemented over five years and will support efforts to improve the quality and affordability of services to MSMEs through four components: (i) improvements to the business and investment climate for MSMEs by, among others, decreasing the amount of time it takes to start a business; (ii) implementation of a matching grants program for MSMEs which supports product or process quality enhancement adhering to international accepted certifications; (iii) increase in the number of MSMEs that have access to financial services such as a pilot partial credit risk guarantee system; and (iv) improvements to the strategic and institutional development of the Ministry of Economy (MIFIC) in the field of competitiveness. This program seeks to benefit approximately 112,000 urban MSMEs in Nicaragua, while generating new employment opportunities. “These projects will support Nicaragua’s efforts to improve economic growth through increased investments in small and medium enterprises. They will also address the country’s urgent need to improve access to water and sanitiation services in rural areas, which is one of the government’s priorities,” said Laura Frigenti, World Bank Director for Central America at the signing ceremony. “The World Bank will continue to collaborate closely with the Government of Nicaragua as it works to reduce poverty in key areas of its National Development Plan,” Frigenti added. The projects were approved by the World Bank’s Board of Directors on June 12, 2008. Both $20 million zero-interest credits funded by the International Development Association (IDA) have a reimbursement period of 40 years with a 10-year grace period. - | 
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