The Inter-American Development Bank (IDB) approved a $250 million loan to help Guatemala address environmental challenges in the Motagua River Basin and improve living conditions for its four million residents, according to a press release. The program will expand solid waste collection and disposal services while increasing treatment of water effluents and strengthening national water quality monitoring systems. This initiative represents the first phase of larger efforts to restore Guatemala’s biggest watershed.
The Motagua River Basin spans 96 municipalities across 14 departments and faces severe pollution challenges. Environmental restoration requires coordinated binational solutions with neighboring Honduras. The region currently suffers from solid and liquid waste pollution, deforestation, forest fires, reduced water flow, and erosion.
Environmental experts estimate that proper solid waste management alone will cost at least $420 million. Achieving safe sanitation for the entire population by 2035 will require approximately $2.14 billion in additional funding. The current conditions threaten the health and livelihoods of millions of residents.
The IDB-funded program will directly benefit 166,000 households with improved sanitation access and 225,000 households with proper solid waste management services. The initiative aims to enhance effluent quality discharged into the watershed and promote circular economy practices for solid waste. Future projects will include building sanitation systems in the Las Vacas River northern sub-basin within Guatemala City Metropolitan Area. The program will increase formal employment opportunities among recyclers, particularly women. Integrated solid waste management centers and municipal composting units will also be developed.
The program includes institutional strengthening measures to improve integrated management of solid waste, sanitation, and water resources. Support will modernize the Ministry of Environment and Natural Resources and the Municipal Development Institute. These capacity-building efforts aim to ensure sustainable long-term management of the basin’s environmental challenges. The institutions will receive technical assistance to enhance their operational capabilities. Strengthened governance will support effective program implementation and monitoring.
The $250 million loan features a 22.5-year repayment term with an eight-year grace period and interest rates based on the Secured Overnight Financing Rate. This financing structure provides Guatemala with flexible terms to implement comprehensive environmental restoration while building institutional capacity. The program marks a significant step toward addressing one of Central America’s most pressing environmental challenges. Regional cooperation will be essential for success across the binational watershed. This operation represents the first of several planned interventions in the Motagua River Basin.
