Water supply and sanitation in Venezuela
Encyclopedia
Venezuela
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...

: Water and Sanitation
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|-
!align="center" bgcolor="lightblue" colspan="3"|Data
|-
!align="left" valign="top"|Access to an improved water source
Improved water source
According to the Joint Monitoring Program for Water Supply and Sanitation by the World Health Organization and UNICEF the following are considered as "improved" water sources:* household connections* public standpipes* boreholes* protected dug wells...


|valign="top"| 93% (2005)
|-
!align="left" valign="top"|Access to improved sanitation
Improved sanitation
According to the Joint Monitoring Programme for Water Supply and Sanitation by the World Health Organization and UNICEF the following are considered as "improved" sanitation:* connection to a public sewer* connection to a septic system* pour-flush latrine...


|valign="top"| 91% (2005)
|-
!align="left" valign="top"|Continuity of supply (%)
|valign="top"| n/a
|-
!align="left" valign="top"|Average urban water use (l/c/d)
|valign="top"| 450 (2008)
|-
!align="left" valign="top"|Average urban water tariff (US$/m3)
|valign="top"| 0.41 (in Caracas, 2010)
|-
!align="left" valign="top"|Share of household metering
|valign="top"| 36% (2008)
|-
!align="left" valign="top"|Share of collected wastewater treated
|valign="top"| 33% (2008)
|-
!align="left" valign="top"|Annual investment in WSS
|valign="top"| US$ 5/capita (1997–2001)
|-
!align="left" valign="top"|Share of self-financing by utilities
|valign="top"| Low
|-
!align="left" valign="top"|Share of tax-financing
|valign="top"| High
|-
!align="left" valign="top"|Share of external financing
|valign="top"| Low
|-
!align="center" bgcolor="lightblue" colspan="3"|Institutions
|-
!align="left" valign="top"|Decentralization to municipalities
|valign="top"| Partial
|-
!align="left" valign="top"|National water and sanitation company
|valign="top"| Yes (Holding company)
|-
!align="left" valign="top"|Water and sanitation regulator
|valign="top"| De iure yes, de facto no
|-
!align="left" valign="top"|Responsibility for policy setting
|valign="top"| Ministry of Environment and Natural Resources
|-
!align="left" valign="top"|Sector law
|valign="top"| Yes (2001)
|-
!align="left" valign="top"|Number of urban service providers
|valign="top"| 20
|-
!align="left" valign="top"|Number of rural service providers
|valign="top"| n/a
|-
|}
Water supply
Water supply
Water supply is the provision of water by public utilities, commercial organisations, community endeavours or by individuals, usually via a system of pumps and pipes...

 and sanitation
Sanitation
Sanitation is the hygienic means of promoting health through prevention of human contact with the hazards of wastes. Hazards can be either physical, microbiological, biological or chemical agents of disease. Wastes that can cause health problems are human and animal feces, solid wastes, domestic...

 in Venezuela
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...

 has been extended to an increasing number of people during the 2000s, although many poor remain without access to piped water. Service quality for those with access is mixed, with water often being supplied only on an intermittent basis and most wastewater not being treated. Non-revenue water
Non-revenue water
Non revenue water is water that has been produced and is “lost” before it reaches the customer. Losses can be real losses or apparent losses . High levels of NRW are detrimental to the financial viability of water utilities, as well to the quality of water itself...

 is estimated to be high at 62%, compared to the regional average of 40%. Tap water is relatively inexpensive, because of a national tariff freeze imposed in 2003 and a policy not to recover capital costs. Investments are financed primarily by the national government, with little reliance on external financing. The sector remains centralized despite a decentralization process initiated in the 1990s that has now been stalled. Within the executive, sector policies are determined by the Ministry of Environment. The national water company HIDROVEN serves about 80% of the population. The remainder is being served by five state water companies, the Corporación Venezolana de Guayana (CVG), a few municipalities and community-based organizations. Since the early 2000s the government encouraged the creation of about 7,500 Mesas Tecnicas del Agua, which have both a technical function and a political mobilization function. Major investment projects include the restoration of the polluted Valencia Lake and of the Guaire river basin in Caracas
Caracas
Caracas , officially Santiago de León de Caracas, is the capital and largest city of Venezuela; natives or residents are known as Caraquenians in English . It is located in the northern part of the country, following the contours of the narrow Caracas Valley on the Venezuelan coastal mountain range...

 (2005–2013).

Access

According to the Ministry of Environment, access to water supply and sanitation has reached 93% in 2008, meaning that Venezuela achieved the UN Millennimum Development Goals for water and sanitation ahead of time. The WHO/UNICEF Joint Monitoring Program's most recent estimates from 2008 are based on the 2001 census results and show that 93% of citizens had access to potable water
Drinking water
Drinking water or potable water is water pure enough to be consumed or used with low risk of immediate or long term harm. In most developed countries, the water supplied to households, commerce and industry is all of drinking water standard, even though only a very small proportion is actually...

 and 91% had access to sanitation. A study for the Corporación Andina de Fomento
Corporación Andina de Fomento
CAF – Latin American development bank – has the mission of stimulating sustainable development and regional integration by financing projects in the public and private sectors, and providing technical cooperation and other specialized services...

 (CAF), however, estimates based on figures from the 2001 census and HIDROVEN statistics that only 82% of the population had access to an improved source of water in 2001. The same source also quotes a lower coverage figure for sanitation than the WHO (only 66%). According to the same study over 4.2 million people had no access to piped water and 8 million residents did not have access to adequate sanitary facilities in 2001. Rural consumers are particularly under-serviced – only 66% receive potable water and 40% have access to adequate sanitation. In the period 1990-2001 the share of population with access to water supply and sanitation modestly increased from 81% to 82% for water, and 63% to 66% for sanitation.
Water and sanitation coverage in Venezuela (2005)
Urban (93% of the population) Rural (7% of the population) Total
Water Broad definition 94% 75% 93%
House connections 89% (2001) 49% (2001)
Sanitation Broad definition 94% 57% 91%
Sewerage 73% (2001) 12% (2001)

Source: WHO
Who
Who may refer to:* Who , an English-language pronoun* who , a Unix command* Who?, one of the Five Ws in journalism- Art and entertainment :* Who? , a 1958 novel by Algis Budrys...

/UNICEF Joint Monitoring Programme (JMP/2008) and JMP country files for Venezuela. Data are based on an extrapolation of the trend between the 1991 and 2001 Censuses.

Service quality

In 2001, the Instituto Nacional de Estadísticas (INE) conducted a study of the quality of water and sanitation services in the country's 335 municipalities and determined that 231 municipalities, approximately 70%, received insufficient water and sanitation services.

In 2008 about 33% of collected wastewater
Wastewater Treatment
Wastewater treatment may refer to:* Sewage treatment* Industrial wastewater treatment...

 was treated, up from about 14% in 2003.

Water supply is not uniformly continuous and often fails to meet basic drinking water quality standards. As a result many consumers are forced to use alternative and more expensive water sources. For example, it is common in the urban ‘barrios’ in central Venezuela for poor consumers to pay the equivalent of approximately US$
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....

1.90 m³ – much more than the tariff for water from the network – for water purchased from a tanker.

Water use

There are no reliable figures on water use in Venezuela given the low coverage of metering. According to one esimate, average residential water use was about 230 liter/capita/day in 2004.. According to another estimate it was twice as much at 450 liter/capita/day in 2010. In parts of Caracas water use is more than 900 liter/capital/day. This compares to 143 l/c/d in Brazil and 259 l/c/d in Peru.

History and recent developments

Before 1991 a national sate-owned enterprise, the Instituto Nacional de Obras Sanitarias (INOS), was in charge of providing water and sanitation services in Venezuela.

First phase of decentralization (1991-2001)

When INOS was dissolved under the Presidency of Carlos Andrés Pérez
Carlos Andrés Pérez
Carlos Andrés Pérez Rodríguez , also known as CAP and often referred to as El Gocho , was a Venezuelan politician, President of Venezuela from 1974 to 1979 and again from 1989 to 1993. His first presidency was known as the Saudi Venezuela due to its economic and social prosperity thanks to...

 the intent was to decentralize service provision to the municipalities that already had the legal responsibility for service provision. However, because of the lack of capacity and resources of most municipalities, service provision in 20 out of the 23 states was temporarily entrusted to the ten regional water companies under the holding company HIDROVEN (see above). In the remaining three states services were provided by the Corporación Venezolana de Guayana
Corporación Venezolana de Guayana
The Corporacion Venezolana de Guayana is a decentralized state-owned Venezuelan conglomerate, located in the Guayana Region in the southeast of the country. Its subsidiaries include the aluminium producer Alcasa....

 (CVG).The Pérez
Carlos Andrés Pérez
Carlos Andrés Pérez Rodríguez , also known as CAP and often referred to as El Gocho , was a Venezuelan politician, President of Venezuela from 1974 to 1979 and again from 1989 to 1993. His first presidency was known as the Saudi Venezuela due to its economic and social prosperity thanks to...

 government also launched a bid for a private concession for the water and sanitation system of Caracas
Caracas
Caracas , officially Santiago de León de Caracas, is the capital and largest city of Venezuela; natives or residents are known as Caraquenians in English . It is located in the northern part of the country, following the contours of the narrow Caracas Valley on the Venezuelan coastal mountain range...

 in 1992. However, the bid failed for lack of interested bidders under the proposed conditions.

Beginning in 1993 some states began to play a more active role in the sector. Until 1999 five decentralized water companies were created with a strong presence of the state governments (see above under service provision). This process began in Monagas
Monagas
Monagas State is one of the 23 states of Venezuela.Monagas State covers a total surface area of 28,900 km² and, in June 30, 2010, had an estimated population of 908,626....

 in 1993 with support from the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

. Some of them also signed management contracts with private operators, which led to an improvement in the performance of the water and sanitation companies.

Between 1994 and 2001 water tariffs throughout the country were increased substantially, so that the ratio of cost recovery to operating costs increased from 27% to 87%. Such a substantial real tariff increase, which apparently did not cause political turmoil, is unusual in developing countries. However, the increase in tariffs was not paralleled by improvement in services. According to the IDB sector performance even deteriorated in this period.

The decentralization process remained very slow. Some municipalities refused to receive the service responsibility unless systems would be modernized, but a mechanism to finance the necessary investments was lacking. About 80% of the population thus continued to be served by HIDROVEN and its subsidiaries, and the slowness of the decentralization process consolidated institutions that were meant to be only temporary.

New sector law and second phase of decentralization (since 2001)

In December 2001 the Government of Hugo Chávez
Hugo Chávez
Hugo Rafael Chávez Frías is the 56th and current President of Venezuela, having held that position since 1999. He was formerly the leader of the Fifth Republic Movement political party from its foundation in 1997 until 2007, when he became the leader of the United Socialist Party of Venezuela...

 passed a new Water and Sanitation Law (Ley Orgánica para la Prestación de los Servicios de Agua Potable y Saneamiento). This law was not passed by Parliament. Instead, together with 45 other laws it was passed by the Executive based on an Enabling Act that temporarily gave the President powers to enact laws and bypass Parliament.

The law aimed at reforming the institutional structure of the sector through:
  • the actual transfer of the responsibility for service provision to the municipalities through the creation of decentralized service providers - Business Units or Unidades de Gestión (UGs) – each of which would serve several municipalities;
  • the creation of a regulatory agency (Superintendencia Nacional de los Servicios de Agua Potable y de Saneamiento - SUNSAPS), to oversee the implementation of the Law, regulate tariffs and subsidies, and develop a monitoring system for the sector;
  • the establishment of a policy making and financing body for the sector (Oficina Nacional para el Desarrollo de los Servicios de Agua Potable y Saneamiento, ONDESAPS), whose primary responsibilities would be the management of a funding mechanism for targeted sector investments, policy formulation and facilitation of the provision of technical assistance to decentralized service providers including guidance on the establishment of decentralized service providers;
  • the creation of a national bulk water company to operate and expand regional water infrastructure; and
  • the establishment of a sector financing fund to channel public resources to the sector under a consistent policy framework.


According to the law HIDROVEN had to complete the transfer within no more than five years from the publication of the law, i.e. until December 2006. However, the transfer has been very slow and the deadline has not been met. Only in a few regions the decentralization to municipalities has advanced, notably in the State of Guárico
Guárico
Guárico State is one of the 23 states of Venezuela. The state capital is San Juan de Los Morros. Guárico State covers a total surface area of 64 986 km² and, in 2007, had an estimated population of 745,100.-Municipalities and municipal seats:...

 where HIDROPAEZ, one of the regional utilities under the umbrella of HIDROVEN, is in the process of being replaced by five business units. The Government has also completed studies on the formation of business units in the states of Cojedes
Cojedes
Cojedes is a town in the Venezuelan state of Cojedes. This town is the shire town of the Anzoátegui Municipality and, according to the 2001 Venezuelan census, the municipality has a population of 14,044.-Demographics:...

, Carabobo
Carabobo
Carabobo State is one of the 23 states of Venezuela, located in the north of the country, about two hours by car from Caracas. The capital city of this state is Valencia, which is also the country's main industrial center. The state's area is 4,650 km² and had an estimated population of...

 and Aragua
Aragua (state)
Aragua State is located in the north-central region of Venezuela. It has plains and jungles and Caribbean beaches. The most popular are Cata and Choroni...

.
Furthermore, the national institutions foreseen by the law so far have not been created. The Ministry of Environment and HIDROVEN thus continue to undertake the national-level functions that the 2001 law had assigned to the new institutions.

In February 2003 tariffs were frozen at the national level through an executive decree. This is in direct contradiction with the 2001 law that stipulates the principle of cost recovery and assigns the responsibility to set tariffs to the municipalities.

Policy and regulation

The Ministry of Environment and Natural Resources is in charge of setting water and sanitation policies in Venezuela, in line with overall government policies. There is a Vice-ministry of Water within the Ministry and as of August 2007 the Vice-Minister was Cristóbal Francisco Ortiz. HIDROVEN is under the authority of this Ministry. The Ministry of Industry and Commerce sets maximum allowable tariffs in the sector.

Service provision

Water and sanitation services in Venezuela are provided by the national water company HIDROVEN, five state water companies, the Corporación Venezolana de Guayana (CVG), a few municipalities and community-based organizations.

According to the Municipal Law (Ley Orgánica de Régimen Municipal) service provision is a responsibility of the country's 335 municipalities, which own the water and sanitation infrastructure and in principle also set water and sanitation tariffs. However, in practice only few municipalities have the capacity and resources to fulfill these responsibilities.

HIDROVEN

In practice service provision in most urban areas of Venezuela is the responsibility of one of ten regional utilities
Public utility
A public utility is an organization that maintains the infrastructure for a public service . Public utilities are subject to forms of public control and regulation ranging from local community-based groups to state-wide government monopolies...

 ( Empresas Hidrologicas Regionales) affiliated with the Compañía Anónima Hidrológica de Venezuela (HIDROVEN), a state-owned enterprise. Each regional utility covers between one and three of the country’s 23 states
States of Venezuela
Venezuela is divided into 23 states , 1 Capital District and the Federal Dependencies that consist of a large number of Venezuelan islands...

. The responsibility for setting tariffs within the maximum levels set by the national government is shared between the regional companies and the municipalities.

Some of the bulk water supply infrastructure which provides water to municipal and state water companies is owned directly by HIDROVEN and its affiliated regional companies.

Corporación Venezolana de Guayana

In the region of Guayana
Guayana Region
The Guayana Region is an administrative region of Venezuela.The region has a population of 1,383,297 inhabitants and a territory of 458,344 km². It borders the independent nation of Guyana which forms part of The Guyanas...

, covering the states of Bolivar
Bolívar (state)
Bolívar State , is one of the 23 states into which Venezuela is divided. The state capital city is Ciudad Bolívar. Bolívar State covers a total surface area of 238,000 km² and in June 30, 2010 had an estimated population of 1,620,359....

, Amazonas
Amazonas (Venezuelan state)
Amazonas State is one of the 23 states into which Venezuela is divided.The state capital is Puerto Ayacucho. The capital until the early 1900s was San Fernando de Atabapo. Although named after the Amazon River, most of the state is drained by the Orinoco. Amazonas State covers a total surface...

 and Delta Amacuro
Delta Amacuro
Delta Amacuro State is one of the 23 states of Venezuela, and is the location of the Orinoco Delta. The Paria Gulf and the Atlantic Ocean are found to the north, Bolívar State is found to the south, the Atlantic Ocean and Guyana are found to the east, and Monagas State is found to the west...

, water and sanitation services in urban areas are provided by the Corporación Venezolana de Guayana
Corporación Venezolana de Guayana
The Corporacion Venezolana de Guayana is a decentralized state-owned Venezuelan conglomerate, located in the Guayana Region in the southeast of the country. Its subsidiaries include the aluminium producer Alcasa....

 (CVG), a conglomerate with its main activities in mining.

State water companies

There are also five decentralized water companies at the state level:
  • Aguas de Monagas
    Monagas
    Monagas State is one of the 23 states of Venezuela.Monagas State covers a total surface area of 28,900 km² and, in June 30, 2010, had an estimated population of 908,626....

    ,
  • HIDROLARA in Lara
    Lara (state)
    Lara State is one of the 23 states into which Venezuela is divided. The state capital is Barquisimeto.Lara State covers a total surface area of and, in 2007, had an estimated population of 1,795,100.- Municipalities and municipal seats :...

    ,
  • Aguas de Mérida,
  • Aguas de Portuguesa
    Portuguesa (state)
    Portuguesa State is one of the 23 states of Venezuela.The state capital is Guanare, founded in 1591.Portuguesa State covers a total surface area of 15,200 km² and, in 2007, had an estimated population of 873,400.-Municipalities:...

    , and
  • Aguas de Yaracuy
    Yaracuy
    Yaracuy State is one of the 23 states of Venezuela. It is bordered by Falcón in the north, in the west by Lara, in the south by Portuguesa and Cojedes and in the east by Cojedes and Carabobo....

    .


The population of these five states is almost 20% of the country's total population.

Municipalities

In some municipalities services are provided through municipal utilities, such as in Aguas de Anaco
Anaco
Anaco is a city in the Venezuelan Anzoátegui State. It is an industrial town, connected to the natural gas and petroleum industries. Estimated population : 106,275 inhabitants.-Notable natives of Anaco:* Ruddy Rodríguez...

 in Anzoátegui
Anzoátegui
Anzoátegui State , is one of the 23 component states of Venezuela, located in the northeastern region of the country. Anzoátegui is well known for its beautiful beaches that attract many visitors. Its coast consists of a single beach approximately 100 km long...

 state, Aguas de Capitanejo and Aguas de Zamora in Barinas
Barinas (state)
Barinas State is one of the 23 states into which Venezuela is divided. The state capital is Barinas. Current President Hugo Chávez was born in this state...

 state, Aguas de Ejido in Mérida state, and Sucre
Sucre
Sucre, also known historically as Charcas, La Plata and Chuquisaca is the constitutional capital of Bolivia and the capital of the department of Chuquisaca. Located in the south-central part of the country, Sucre lies at an elevation of 2750m...

 in Miranda
Miranda (state)
Miranda State is one of the 23 states into which Venezuela is divided. It is ranked second in population among Venezuelan states, after Zulia State. In June 30, 2010, it had approximately 2,987,968 residents. It also has the greatest Human Development Index in Venezuela, according to the...

 state.

Community-based organizations

Rural water systems are managed by community-based organization, including some cooperatives. In 2003 there were also 20 urban cooperatives that provided water services at the neighborhood level. The Chávez government encourages such "community experiences", which also include so-called "technical water tables" (Mesas Técnicas de Agua). These are associations involved in monitoring neighborhood-level segments of water supply and sanitation networks, including the identification and reduction of leakage and illegal connections. In 2003 there were about 1,500 such technical water tables in Venezuela.

Economic efficiency

Non-revenue water
Non-revenue water
Non revenue water is water that has been produced and is “lost” before it reaches the customer. Losses can be real losses or apparent losses . High levels of NRW are detrimental to the financial viability of water utilities, as well to the quality of water itself...

 stood at 62% in 2000, far above the regional average of 40% and higher than its historical level of 55% in 1996 and 59% in 1997. HIDROVEN suggests illegal connections are a major contributor to poor non-revenue water performance in the country. An inadequate record maintenance and rehabilitation likely also contributes to high losses.

Tariffs and cost recovery

Cost recovery. Revenues usually are not sufficient to meet operating costs - the ratio of revenue to operating costs was estimated at 86% in 2002. This was a substantial increase compared to 27% in 1994, 65% in 1997 and 75% in 2000, despite high levels of inflation. As of 2010, 36% of all users, mainly in groups with low ability to pay, received water free of charge. In 2010 Hidrocapital, which serves Caracas, charged on average the equivalent of US$0.41 per cubic meter, while its costs were US$0.44 per cubic meter. For 2008, Hidroven had a sales revenue of MB$786, thus covering 77% of its operation and maintenance costs of MB$1,024.

Tariff level and adjustments. Tariff levels vary substantially within Venezuela by a factor of almost 1:10 between regional companies, reflecting differences in the cost of service provision. The highest tariffs are found in Caracas
Caracas
Caracas , officially Santiago de León de Caracas, is the capital and largest city of Venezuela; natives or residents are known as Caraquenians in English . It is located in the northern part of the country, following the contours of the narrow Caracas Valley on the Venezuelan coastal mountain range...

 and the lowest in Aguas de Yaracuy
Yaracuy
Yaracuy State is one of the 23 states of Venezuela. It is bordered by Falcón in the north, in the west by Lara, in the south by Portuguesa and Cojedes and in the east by Cojedes and Carabobo....

 and Llanos
Llanos
The Llanos is a vast tropical grassland plain situated to the east of the Andes in Colombia and Venezuela, in northwestern South America. It is an ecoregion of the Flooded grasslands and savannas Biome....

. Tariffs were frozen in February 2003 at the national level, leading to a 60% tariff decline in real value because of inflation until 2010.

Metering, billing and collection. In 2008 the share of metered water consumption in total water consumption was 36%, up from only 20% in 1998. However, only about half the meters were read in 2008 with a meter reading rate of only 17.5%. Billing and collection performance is inadequate as total sector collection in 2003 amounted for merely 73% of the total billing. In 1998 this coefficient stood at only 62%. In individual companies the ratio varied greatly between 26% in Yaracuy
Yaracuy
Yaracuy State is one of the 23 states of Venezuela. It is bordered by Falcón in the north, in the west by Lara, in the south by Portuguesa and Cojedes and in the east by Cojedes and Carabobo....

 and 80% in Mérida
Mérida (state)
Mérida State is one of the 23 states of Venezuela. The state capital is Mérida.Mérida State covers a total surface area of 11,300 km² and, in 2007, had an estimated population of 843,800.- Climate and Vegetation :...

.

Investment

Historical investment levels There are no recent data on the level of investments in the sector. In the five years between 1997 and 2001 Venezuela invested US$ 637 million in water and sanitation, or about US$ 127 million annually on average. Investment in the sector has historically been volatile. For example, annual investments fluctuated in the 1986-1998 period between less than US$100 million (in 1989) and US$400 million (in 1992). To a large extent investment levels mirror fluctuation in oil prices. Investment levels declined from 1986-1989 when oil prices were very low. Investments sky-rocketed in 1992 after oil prices had increased. Then they plummeted again when oil prices decreased during the remainder of the 1990s. The volatility in sector financing has made it difficult to initiate a sustainable medium-term investment program needed to rehabilitate infrastructure and extend access to services.

Planned investment levels In 2002 the Government adopted an ambitious six-year investment plan for the sector. Under that Plan by the end of 2007 access to potable water and sanitation should both reach 99%, non-revenue water should be reduced to 45%, collection efficiency should increase to 95% and the share of treated wastewater should reach 30%. The plan estimates that a total of US$ 4.77 billion will be required between 2003-2015 for the sector, which implies an average annual investment of approximately US$ 500 million, or about four times historic investment levels.

Financing

Sources of financing Before the decentralization of the 1990s investments were almost exclusively financed by central government transfers through a number of different programs, including funds borrowed from international financial institutions and passed on as grants to the service providers. In 2000-2001 state governments and municipalities financed almost half of total investments of US$120m and US$190m respectively. The capital market makes no contribution to sector financing.

Procedures for Investment Financing The 2001 sector law calls for the creation of a Financial Assistance Fund (Fondo de Asistencia Financiera - FAF) to be administered by a new entity called ONDESAPS which would coordinate and target investments in the sector (see section on the new sector law above). Until 2007 neither FAF nor ONDESAPS have been created. Neither investment subsidies nor recurrent subsidies, whether paid by the national government or state governments, are linked to performance improvements.

External support

The Inter-American Development Bank and the Andean Development Corporation are the main institutions that provide external support for water supply and sanitation in Venezuela. It was reported in 2004 that the lack in the availability of counterpart funds, which the government has to provide as part of their obligations to execute projects financed by external agencies, had paralyzed various large externally financed projects.

Interamerican Development Bank In 2010 the IDB
IDB
IDB can mean:* Inter-American Development Bank, also known as IADB* IDB Communications Group, Inc., a constituent of MCI Inc.* Illegal Diamond Buying, the term used at the turn of the 19th-20th century for diamond trading outside the De Beers cartel....

 provided a $50 million loan to promote the efficient use of drinking water by replacing pipes and installing meters for 80,000 households in at least five of the subsidiaries of Hidroven, including in the Ocumarito neighborhood in Caracas. Previously the IDB had attempted to support the reform of the water and sanitation sector through a decentralization loan of US$100 million that was approved in 1998 and had to be cancelled subsequently. The loan had aimed at introducing private sector participation, following the model of management contracts in the state of Monagas
Monagas
Monagas State is one of the 23 states of Venezuela.Monagas State covers a total surface area of 28,900 km² and, in June 30, 2010, had an estimated population of 908,626....

 and Lara
Lara (state)
Lara State is one of the 23 states into which Venezuela is divided. The state capital is Barquisimeto.Lara State covers a total surface area of and, in 2007, had an estimated population of 1,795,100.- Municipalities and municipal seats :...

.

Andean Development Corporation The Andean Development Corporation (Corporación Andina de Fomento
Corporación Andina de Fomento
CAF – Latin American development bank – has the mission of stimulating sustainable development and regional integration by financing projects in the public and private sectors, and providing technical cooperation and other specialized services...

, CAF supported the water and sanitation sector through various loans, including five loans approved until 2003 for a total of US$292m, of which three for HIDROCAPITAL, the subsidiary of HIDROVEN serving Caracas. In 2004 CAF approved a US$15m loan to improve water and sanitation services in the Peninsula of La Guajira in Zulia
Zulia
Zulia State is one of the 23 states of Venezuela. The state capital is Maracaibo. In June 30, 2010, it had an estimated population of 3,821,068, giving it the largest population among Venezuela's states. It is located in the northwestern part of the country...

 state. In 2005 the CAF reassigned US$25m from a non-disbursing water and sanitation sector modernization and rehabilitation loan to environmental projects. At the beginning of 2008, the CAF announced that it has approved a water and sanitaton loan for the Venezuelan states of Amazonas
Amazonas (Venezuelan state)
Amazonas State is one of the 23 states into which Venezuela is divided.The state capital is Puerto Ayacucho. The capital until the early 1900s was San Fernando de Atabapo. Although named after the Amazon River, most of the state is drained by the Orinoco. Amazonas State covers a total surface...

, Anzoátegui
Anzoátegui
Anzoátegui State , is one of the 23 component states of Venezuela, located in the northeastern region of the country. Anzoátegui is well known for its beautiful beaches that attract many visitors. Its coast consists of a single beach approximately 100 km long...

, Aragua
Aragua (state)
Aragua State is located in the north-central region of Venezuela. It has plains and jungles and Caribbean beaches. The most popular are Cata and Choroni...

, Bolívar
Bolívar (state)
Bolívar State , is one of the 23 states into which Venezuela is divided. The state capital city is Ciudad Bolívar. Bolívar State covers a total surface area of 238,000 km² and in June 30, 2010 had an estimated population of 1,620,359....

, Cojedes
Cojedes
Cojedes is a town in the Venezuelan state of Cojedes. This town is the shire town of the Anzoátegui Municipality and, according to the 2001 Venezuelan census, the municipality has a population of 14,044.-Demographics:...

, Delta Amacuro
Delta Amacuro
Delta Amacuro State is one of the 23 states of Venezuela, and is the location of the Orinoco Delta. The Paria Gulf and the Atlantic Ocean are found to the north, Bolívar State is found to the south, the Atlantic Ocean and Guyana are found to the east, and Monagas State is found to the west...

, Sucre
Sucre (state)
Sucre State is one of the 23 states of Venezuela. The state capital is Cumaná. Sucre State covers a total surface area of 11,800 km² and, in 2007, had an estimated population of 916,600.-Municipalities and municipal seats:...

 and Trujillo
Trujillo (state)
Trujillo State is one of the 23 states of Venezuela. Its capital is Trujillo. The state is divided into 20 municipalities and 93 parishes. Trujillo State covers a total surface area of 7,400 km² and, in 2007, had an estimated population of 711,400....

. The program is estimated to have a total cost of US$72.3m, of which CAF will finance US$50m, the remainder being financed by local counterpart funds. The program will be executed by Hidroven.

Canadian Development Agency The Canadian Development Agency CIDA finances a sanitation project for Caracas.

External links


Key sources

  • Corporación Andina de Fomento (CAF): Venezuela. Análisis del Sector Agua Potable y Saneamiento, Marzo de 2004, written by María Elena Corrales CAF Agua y Saneamiento Venezuela Accessed on 10 October 2007
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