Press Release

Rural development project in Guatemala receives US$10 million OFID loan

39/2006 May 11, Vienna, Austria
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The OPEC Fund for International Development (OFID) today signed a US$10 million loan agreement with the Republic of Guatemala to co-finance a multi-faceted rural development project. To be implemented in the country’s Western Region, the project aims to boost economic activity and raise living standards among the rural poor, and is part of a nationwide program that is being developed in different, regional phases.

Rural poverty is widespread in Guatemala, particularly in areas with the highest concentration of indigenous people. Most are landless or practice subsistence farming on small plots of land. They supplement their household income by selling handicrafts or doing seasonal work on commercial farms.

Along with institution strengthening and capacity building measures, the project will feature a number of initiatives that encourage the participation of women and indigenous populations. Among others, activities will include teaching youth basic labor skills and offering training classes in management and marketing to small and micro enterprises owners. A Social Investment Fund will be created to finance community-based projects such as rehabilitating schools and health clinics, and constructing child care centers, water treatment systems and electrification schemes. A Productive Capitalization Fund will also be set up to support the implementation of micro and small-scale schemes, including irrigation systems, small dams and wells, and the construction of farming terraces, fences, greenhouses and handicraft workshops. By supporting income-generating activities and agricultural growth and diversification, as well as providing better access to local and external markets, the project will help create jobs and encourage intensified economic activity.

OFID has previously approved 13 other loans to Guatemala, including one for balance of payments support and 12 project loans in the transportation, health, agriculture and education sectors. The country has also benefited from five technical assistance grants in the areas of social productivity, agriculture, health and energy, as well as one emergency grant to help hurricane victims.

Today’s agreement was signed in Vienna by HE Mr. Luis Alberto Padilla Menéndez, Ambassador Extraordinary and Plenipotentiary of the Republic of Guatemala to Austria, and by HE Mr. Jamal Nasser Lootah, Chairman of the Governing Board of OFID.