Under the agreement, Spain will set priorities and evaluate the impact of the projects financed by the Fund, while the IDB will identify and prepare specific investments and oversee their implementation and evaluation, in coordination with the recipient governments. The agreement was announced during the 18th Ibero-American Summit being held in San Salvador.
"I am very pleased that one year after my announcement at the Seventeenth Ibero-American Summit held in Santiago, Chile, the Fund for Cooperation for Water and Sanitation is now a reality," said Spanish Prime Minister José Luis Rodríguez Zapatero.
The memorandum of understanding to establish the Spanish Fund for Water and Sanitation was signed by IDB President Luis Alberto Moreno, Soraya Rodríguez, Secretary of State for International Cooperation and President of the Spanish Agency for International Development (known by the Spanish acronym AECID), and David Vegara, Secretary of State for Economic Affairs of Spain.
Spain is providing €300 million in 2008 as its initial contribution to the new fund. The grants will be available to finance projects in water supply, sewerage, wastewater treatment, urban storm drainage, water resource management, adaption to climate change, efficiency and operations management.
Moreno praised the Spanish initiative, pointing out that it comes in the midst of an international financial crisis, and at a time when many governments are under pressure to cut back on their contributions to development.
"This is an extraordinary commitment that will help close the gap in water and sanitation coverage in Latin America," said the IDB president. "This gesture not only demonstrates the generosity of the Spanish people and their support for our region, it also challenges us to think big, to find ambitious and definitive solutions to these problems," Moreno added.
According to Moreno, at least 85 million people in Latin America and the Caribbean do not have access to drinking water and some 115 million live without proper sanitation.
All the member countries of the Ibero-American Community and Haiti will have access to the fund. National, regional and local government agencies, state-owned enterprises, cooperatives and other types of water and sanitation service providers will be eligible for the grants.
"In our view, universal access to sustainable water and sanitation services is crucial to make progress towards the ultimate goal of Spain's policy on cooperation for development, which is to fight poverty," said AECID President Rodríguez.