IDB Approves $128.5 Million Package to Boost Water Security and Climate Resilience in Ecuador

The initiative is aligned with the IDB Group’s Amazonia Forever program, which promotes sustainable development while protecting the Amazon region’s ecosystems and natural resources.

Access to safe water and reliable sanitation services remains a major priority for many communities across Ecuador, particularly in regions facing growing pressures from climate-related risks. To address these challenges, the Inter-American Development Bank (IDB) has approved a financing package worth $128.48 million aimed at improving water security and strengthening the capacity of Banco de Desarrollo del Ecuador B.P. (BDE B.P.) to mobilize additional investment.

The package combines multiple sources of financing to support infrastructure projects and climate resilience efforts. It includes a $120 million multiple works investment loan, a $4.76 million loan from the Green Climate Fund, and a $3.72 million grant from the same fund. An additional $12 million in local counterpart funding will support implementation.

The initiative is aligned with the IDB Group's Amazonia Forever program, which promotes sustainable development while protecting the Amazon region's ecosystems and natural resources.

Expanding Essential Services

The program is expected to directly benefit around 283,000 people across Ecuador. Among them, approximately 166,000 residents live in the Amazon region, where improving access to basic services remains a pressing need.

Investments will focus on expanding and upgrading drinking water systems, sanitation networks and solid waste management infrastructure. These improvements are intended to increase service coverage, strengthen reliability and improve public health outcomes for communities that depend on these systems.

Building Resilience to Climate Risks

Beyond service expansion, the program seeks to reduce the impact of floods and droughts, two climate-related threats that increasingly affect communities and local economies.

Planned investments include improvements to stormwater drainage infrastructure and strategic planning measures designed to support the conservation and protection of water resources. These actions are expected to strengthen local resilience and help communities adapt to changing environmental conditions.

The Green Climate Fund financing specifically targets water resilience efforts in Ecuador's Amazon region, helping vulnerable communities better manage climate risks while safeguarding critical ecosystems.

Financing Structure

The largest component of the package is the $120 million IDB investment loan, which carries a repayment period of 23.5 years, including a seven-year grace period. The loan's interest rate is based on the Secured Overnight Financing Rate (SOFR).

The Green Climate Fund loan of $4.76 million offers a 20-year repayment term with a five-year grace period and a fixed interest rate of 0.75%, providing favorable financing conditions for climate resilience investments.

By combining international financing with local counterpart contributions, the program aims to strengthen Ecuador's ability to deliver sustainable infrastructure projects while supporting long-term water security, climate adaptation and environmental protection goals.