Haiti

Haiti: WB approves US$24.5 million in grants for economic governance, road rehabilitation

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Press Release No: 2010/180/LAC

WASHINGTON, December 8, 2009 - The World Bank Board of Directors today approved two grants for a total of US$24.5 million to support Haiti's economic governance reform agenda and rehabilitation of key roads and bridges.

"The new funds will allow us to create fiscal space for priority poverty reduction programs while addressing urgent recovery and reconstruction needs," said Haitian Finance Minister Ronald Baudin.

The first US$12.5 million grant approved today, for the Third Economic Governance Reform Operation (EGRO III), seeks to improve the effectiveness, transparency and accountability of public sector institutions by consolidating economic governance reforms and strengthening core institutions.

In particular, the operation aims to contribute to:

- Reducing inefficiencies in the electricity sector through improvements in the management of Electricité d'Haïti (EDH), the public electricity utility.

- Improving public financial management, to raise and use public resources in a more efficient and transparent way, prioritizing actions related to poverty reduction and growth.

- Strengthening the legal framework for public procurement, to contribute to more transparent and cost-effective public expenditure.

The grant will provide further support to Government reforms initiated under two previous operations, EGRO I (June 2006) and EGRO II (May 2008), as well as through the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative (completion point - June 2009). These supported reforms in governance, the civil service, public finance management, and public procurement.

"These grants bolster the Government's program and are aimed at combining longer-term institution building with the delivery of quick, visible results to the population," said Yvonne Tsikata, World Bank Director for the Caribbean.

The second grant approved today provides US$12 million of additional financing for the Transport and Territorial Development Project. This will replenish the project for road and bridge reconstruction undertaken following the hurricanes and tropical storms that struck Haiti in 2007 (Noel) and 2008 (Fay, Gustav, Hanna, Ike), as well as cover additional costs related to the road rehabilitation works included in the original project approved by the Board in April 2006.

Among the post-storm reconstruction works financed by the project are a number of spot interventions, road repairs and road protection against erosion on the Departmental Road No. 41 (RD41) between the towns of Jacmel and Marigot, as well as on the National Road No. 7 (RN7) near the city of Les Cayes and on the National Road No. 2 (RN2) between Saint-Louis du Sud and Aquin. Road maintenance and protection works have proved to significantly increase the resilience of road and bridge infrastructure to natural disasters such as the ones that struck Haiti in 2007 and 2008.

Another important project objective is to rehabilitate the National Road No. 3 (RN3) between Carrefour Barrière Battant and Carrefour la Mort (8.5 km). The other sections of RN3 (Barrière Battant - Saint Raphael - Hinche) will be rehabilitated with financing from the European Union and the French development agency (Agence Française de Développement, AFD). This will convert RN3 into a major transport corridor, an alternative to the country's main highway, RN1, which links Haiti's two largest cities, Port-au-Prince and Cap Haitian. The expected increase in traffic justifies an upgrade of standards, and subsequently more costly rehabilitation works than originally planned. Close coordination between the Haitian Government and the three donors will help ensure that these major road improvement works on RN3 bring the most benefits to the Haitian population.

The two grants approved today come from the International Development Association (IDA), the part of the World Bank that helps the world's poorest countries by providing interest-free credits and grants for programs that boost economic growth, reduce inequalities and improve people's living conditions. Since January 2005, IDA has provided a total of US$308 million in assistance for Haiti. In addition, trust funds administered by the World Bank have given more than US$55 million since 2003.

For more information on these projects, please visit:

Third Economic Governance Reform Operation (EGRO III)
http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=40941&menuPK"8424&Projectid=P117944

Transport and Territorial Development Project - Additional Financing
http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=40941&menuPK"8424&Projectid=P114059

For more information on the World Bank's work in Haiti, please visit:

http://www.worldbank.org/ht

Contacts:

In Washington:

Alejandro Cedeño (202) 473-3477, acedeno@worldbank.org

Patricia da Camara (202) 473-4019, pdacamara@worldbank.org