Chile will revitalize poor neighborhoods and emblematic infrastructure assets with a $90 million loan from the Inter-American Development Bank (IDB), announced on October 22, 2015.
The loan is designed to improve the living conditions and environment of residents of poor neighborhoods, inject value into their real estate assets, increase commercial and cultural activities and boost the residents’ participation in the effort, in order to guarantee that the activities are sustainable.
The project will finance coordinated activities in at least five municipalities, including improvements in physical infrastructure, support for local economic and cultural development and provision of resources that will enable the effective participation of residents.
“As it starts to think about coordinating activities at the neighborhood level but led by municipalities, Chile faces a great challenge. This program is an excellent opportunity to show that with adequate management, it is possible to make cities more egalitarian and equitable,” said Veronica Adler, IDB project team leader. “This program will seek to take advantage of the existing capital, to respect the tangible and intangible assets and to have an impact on the poor outer sections of urban areas.”
The program will provide resources to improve selected real estate assets; build, restore or improve urban environments; restore and improve avenues, streets, plazas, footpaths, sidewalks and bike lanes; and improve urban furnishings, lighting and landscapes.
The project will promote economic and cultural development through studies to identify the specific needs of the businesses operating in each neighborhood as well as opportunities for new economic and cultural undertakings, including the creation and promotion of economic opportunities for women.
It will also implement plans to improve the competitiveness of existing business activities, through the development of innovative strategies to diversify and improve the profiles of local economic and cultural initiatives.
The project also includes the installation of a project office in each neighborhood, the design and implementation of a plan to communicate and disseminate reports on the activities, and a fund for grants to community initiatives that address various neighborhood problems.
It will also strengthen the technical and operational capacities of the municipalities so that they can successfully carry out the project as well as subsequent activities.
It is expected that the project will improve the quality of the infrastructure, reduce the percentage of deteriorated real estate assets and increase the commercial activity in each neighborhood and the percentage of neighbors who participate in the budgeting process in the selected neighborhoods.
The IDB credit for $90 million is for 11 years, with a grace period of 11 years, an interest rate based on LIBOR and a counterpart contribution of $90 million.