Costa Rica water authority to explain loss of US$400mn loan

The income and public spending control committee of Costa Rica’s congress will summon authorities of water authority AyA to explain why funds from the Central American Bank for Economic Integration were not used as established in the loan agreement, leading to the loss of a US$400 million credit.

The funds were to be used to build the fifth stage of the Orosi II project to supply the metropolitan aqueduct and benefit 638,000 inhabitants of the San José, Heredia and Cartago cantons. The project was reportedly removed from the urgent works list. 

“The non-use of the funds has resulted in water cuts during long periods in many of those communities,” lawmaker Sofía Guilén, who presented the motion to summon the authorities, was quoted as saying by local media.  

The loan was granted in November 2020 and involved a two-year execution period. The country was supposed to repay it within 20 years after a five-year grace period. 

But AyA said in November 2022 that the funds had not been used because technical studies had not been completed and the planning and economic policy ministry had not given the green light.