Mexico: World Bank Approves $200.51 Million to Expand
Housing
Contacts:
In Mexico: Gabriela Aguilar (5255) 54-80-4252
Gaguilar2@worldbank.org
In Washington: Alejandra Viveros (202) 473-4306
Aviveros@worldbank.org

WASHINGTON, November 29, 2005 – The World Bank’s Board of Directors today approved a $200.51 million loan to support the Mexican
government’s efforts to improve access to housing and serviced land for low and moderate-income households nationwide.

“This loan will help poor families get homes and improve both basic services and living conditions,”said Isabel Guerrero, World Bank Country
Director for Colombia and Mexico. “By increasing access to better housing, the project will support the country’s strategy for reducing poverty,
enhancing competitiveness, and promoting environmental sustainability.”

The Second Affordable Housing and Urban Poverty Reduction Development Policy Loan will support a national slum upgrading program, as well
as affordable housing and land development, for low and moderate-income families - which comprise two-thirds of Mexico’s population. This operation is
the second in a three-loan program to support the Government of Mexico’s housing and urban reform agenda.

The new loan will consolidate and deepen the reforms made under the first one. In particular, it will support five main areas:

       Reforming the operation and structure of federal housing subsidies.
       Developing new financing mechanisms for home purchases, improvements, and additions for low- and moderate-income populations.
       Expanding the program for modernizing property registries.
       Strengthening popular participation and planning processes in the government’s flagship slum upgrading program known as Hábitat.
       Expanding low- and moderate-income land development.


“Better access to housingfor low-income households will help the country build a strong middle class by supporting capital accumulation and creating
greater income opportunities,” said Abhas K. Jha, World Bank task manager for the project. “The project will also have a strong environmental
impact by improving conditions in slums, and promoting formal development on appropriate, well-designed sites.”

The first Affordable Housing and Urban Poverty Reduction Development Policy Loan, for $100 million, was approved by the World Bank Board of
Directors in June 2004. The program is also bolstered by an $8 million, three-year technical assistance loan approved in November 2004.

The new $200.51 million, fixed-spread loan from the International Bank of Reconstruction and Development (IBRD) has a repayment period of 15 years,
including a five-year grace period.

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For more information on the Second Affordable Housing and Urban Poverty Reduction Development Policy Loan, please visit:
http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=40941&menuPK=228424&Projectid=P089852

For more information about the World Bank's work in Mexico, please visit: http://www.worldbank.org/mx

For more information about the Bank’s work on Public Sector Reform in Latin America & the Caribbean, please visit:
http://www.worldbank.org/lacpublicsector