IDB Approves $70 Million to Improve Drinking Water for 345,000 People in Honduras

Investment in hydraulic sectorization will divide the distribution network into manageable sections, giving operators greater control over how water moves through the system.

Families in Honduras' Central District Municipality are set to benefit from a $70 million investment in drinking water services, with improvements designed to make supplies more reliable and address inequalities linked to inadequate access to safe water. Approved by the Inter-American Development Bank's (IDB) Board of Executive Directors, the Specific Investment Loan (ESP) will fund infrastructure upgrades and strengthen the Municipal Water and Sanitation Unit (UMAPS), which manages the system.

The municipality encompasses Tegucigalpa, the country's capital, and its twin city, Comayagüela, where poor water quality and inadequate access to safe supplies are associated with a high incidence of waterborne diseases. The program connects improvements in an essential public service with the broader effort to reduce structural factors contributing to poverty and inequality, placing low-income and vulnerable households among its key beneficiaries.

More Dependable Water for Homes and Communities

An estimated 345,000 people will benefit from the program, comprising 110,000 direct beneficiaries and 235,000 indirect beneficiaries, with improved service continuity expected to provide a more dependable and efficient drinking water supply. For households facing unreliable access, the investment addresses an everyday need that affects health and the ability to manage basic domestic tasks.

The planned work focuses on the distribution system and the utility's capacity to keep it operating effectively, bringing infrastructure improvements together with stronger management. Low-income and vulnerable families stand to benefit particularly from better service continuity, making reliable access to drinking water a central measure of the program's value to the communities it serves.

Replacing Ageing Infrastructure and Managing Water Pressure

Investment in hydraulic sectorization will divide the distribution network into manageable sections, giving operators greater control over how water moves through the system. Pressure management will form part of this work, supported by the replacement or installation of pipelines and the rehabilitation or replacement of obsolete infrastructure.

Pumping facilities will be rehabilitated, optimized and expanded, with new equipment installed to measure water volumes, flow rates and pressure levels across the network. These upgrades will give UMAPS better information about system performance and stronger tools for managing distribution, supporting the delivery of a more reliable service through improvements to both physical assets and day-to-day operations.

Stronger Utility Management Backed by Long-Term Financing

UMAPS will receive support to improve its operational and commercial management, including digital tools, new working methods and institutional and technical improvements. The program will strengthen the utility's ability to plan, operate and expand the drinking water system, helping it manage the upgraded infrastructure and respond to service needs over the longer term.

Of the $70 million loan, $42 million comes from the IDB's Ordinary Capital, carrying a 25-year term, a 5.5-year grace period and an interest rate based on the Secured Overnight Financing Rate, known as SOFR. The remaining $28 million comes from Concessional Ordinary Capital, with a stated 40-year amortization period and a 0.25% interest rate, providing lower-cost financing for part of the investment.

The package brings network renewal, pumping improvements, measurement equipment and utility management into a single program focused on better drinking water services. Its intended benefits reach beyond infrastructure, supporting safer and more dependable access for households in Tegucigalpa and Comayagüela that face the greatest difficulties securing a reliable supply.