Rejigged IDB loan includes US$10M in housing subsidies

-for communities near Sheriff St to Mandela Ave

Following the revamping of a road project, US$10 million (G$2 billion) from an Inter-American Development Bank (IDB) loan will go towards housing subsidies in Sophia, Cummings Lodge and nearby areas.

The project profile of the reformulated IDB project disclosed that US$30 million in total will be allocated to housing. The remainder of the US$66.5 million loan will go its originally intended target, the Sheriff Street to Mandela Avenue thoroughfare and associated infrastructure.

According to the IDB document, the reformulation of the huge loan came following a May 2nd, 2017 request by the Minister of Finance Winston Jordan. This request came virtually two years after the APNU+AFC government entered office. Originally, a much larger Sheriff St- Mandela Avenue project had been envisaged going all the way back to 2012 under the former PPP/C government.

The reformulation of the loan will see the housing component of US$30 million spent on areas close to the Sheriff Street-Mandela Avenue area.

The US$10 million subsidies component, according to the IDB document, “will finance the delivery of subsidies to contribute to affordable housing solutions for low-income households in the Georgetown area, for (i) housing improvement; and (ii) construction of core homes on existing serviced lots.” The document said that the subsidies will be administered as grants in tranches benchmarked against pre-established construction milestones.

Subsidies derived from international funding are usually frowned upon, particularly when they are drawn from loans which have to be repaid.  The subsidies could also be politically sensitive as many of the areas to be targeted could be considered to be constituencies of the governing coalition. How families are identified for the subsidies will likely draw much interest.

The second component of the housing loan will see US$18 million allocated for the consolidation of existing housing schemes. The IDB project profile said that this will follow a multiple works approach, which will see completion or rehabilitation of infrastructure and services on housing sites in the city. The document said that specific investments will be tailored to local conditions and would include secondary road maintenance and rationalisation, climate-ready drainage, power and water supply and community facilities on publicly owned lands, which will encompass “gender considerations regarding access and use.” The document said that these sites will be chosen via the Central Housing and Planning Authority (CH&PA), according to basic infrastructure deficits, concentration of low-income households and accessibility as determined by the number of trips toward the Sheriff-Mandela travel zones.

The third component of US$2 million will fund activities for project management and monitoring and evaluation for the CH&PA and operations and maintenance training for neighbourhood councils in charge of housing sites.

In its discussion of the reformulated project and the justification for it, the IDB project document said that many of the 310,000 people in Georgetown reside in areas that are vulnerable to flooding and the impact of climate change. It added that 26.64% of the population is estimated to be multi-dimensionally poor, which is higher than the regional average of 18.04%. It further said that 29% of the population resides in overcrowded housing and that criminality in the city is also high – 33.8 murders per 100,000 persons – above the regional average of 26 and perceived to be exacerbated by the absence of community facilities and public spaces.

The document noted that basic infrastructure in housing areas is developed incrementally by the CH&PA. It noted that this approach was supported by two positively-evaluated IDB low income settlement programmes but that despite this there are still 249.5 km of roads and associated drainage which still have to be completed to improve living conditions for over 32,000 households.

The size of the reformulated loan is US$66.5 million, which includes US$3 million in counterpart financing and uncommitted balances of US$700,000 from the original advances. It will be met by an even split in bank financing from regular ordinary capital and concessional ordinary capital.

In September, 2017, the CH&PA had held several consultations in the Sophia area over the project.

Senior Community Officer from the CH&PA Donelle Best-Bascom had said that the reformulated loan would see major infrastructural work being done in Pattensen/ Turkeyen (Section B), Section C Cummings Lodge, Turkeyen (Section C and D), Block ‘E,’ Sophia, Block ‘X,’ Liliendaal (Section A), Block ‘AA’ and ‘BB,’ Sophia (Plum Park), and Block ‘F’ and ‘R,’ Sophia.

CH&PA Engineer Randolph Hunte had explained at the consultation that the reformulated loan would allow for the building of comprehensive communities, which are expected to facilitate community development and economic growth. The works in the various community will also encompass the upgrading of some 17 kilometers of existing roads, installation of solar-powered LED street lights, construction of sidewalks and pathways, upgrades to community buildings and grounds and for subsidies for the construction of core homes and home improvement projects.

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