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Dominican Republic: World Bank approves US$20 Million to Foster Local Development through Municipalities

The World Bank Board of Directors today approved US$20 million for the Dominican Republic in support of the Municipal Development Project, which aims to improve the technical and financial capacity of local governments.  The project will be implemented at the national level by the Ministry of Economy, Planning and Development  (SEEPyD), and by the 30 municipalities at the local level, selected based on percentage poor population, percentage illiterate, and population density, transport access and connectivity, economic potential, and natural resource management criteria.

This project approved today represents an ideal instrument for the Government to continue to implement the newly enacted legislation on decentralization and local development and the territorial development plans,” said Temístocles Montás, Dominican Republic Minister of Economy, Planning and Development.

This loan is fully consistent with the recently-approved 2010-2013 Bank’s Country Partnership with the Dominican Republic and it will start working with five pilot rural municipalities ( Bayaguana, Padre Las Casas, Las Matas de Farfán, Tamayo and Polo) that are among the 30 municipalities that would be eligible to participate.

Through the institutional strengthening of local governments, and specifically of the local participatory and budget planning processes, the World Bank will support the Government’s efforts towards a more transparent and democratic use of the funds to improve distribution of resources and generate more equal economic growth,” said Yvonne Tsikata, World Bank Country Director for the Caribbean.

This initiative will have the following components:

1)     Institutional Strengthening; 2) Municipal Investments/Sub-projects, and; 3) Project Administration, Monitoring and Evaluation.

In addition, the following activities will be developed:

(a)   Technical assistance in core municipal management functions such as participatory management and budgeting, procurement, financial and human resource management; and

(b)   Matching grants for investment sub-projects identified in the Municipal Development Plan.

“The implementation of this Project will promote good governance and a greater social cohesion in the country. It will also contribute to strengthening public institutions in the Dominican Republic,” said Roby Senderowitsch, World Bank Country Manager for the Dominican Republic. “We believe that these types of projects that promote community participation and empowerment hand in hand with public investment at the local level, are essential for poverty reduction and for building a more fair society, with more opportunities for all,” he added.

The US$20 million Specific Investment Loan (SIL) would be a Fixed Spread Loan (FSL) payable in 18 years, including 17 ½ years of grace.

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