The work is part of the Neighborhood Upgrading Program, which has been designed to legalise land ownership, provide basic infrastructure and support community development, thereby helping some 250,000 families.

‘By focusing on historically disadvantaged urban areas, our neighbourhood improvement programmes provide a broad range of benefits to the city,’ said IDB project team leader Francisca Rojas.

‘Neighborhoods that have basic services and community facilities can help to reverse urban exclusion and improve the quality of life of residents.’

The programme will provide basic infrastructure such as a supply of potable water, sewage systems, storm drains, and gas and electricity connections to homes.

New street lighting, street paving and the creation of green areas will also be funded, the bank said.

The IDB’s $200m credit is for 25 years, with a 5.5 year grace period, an interest rate based on LIBOR and a local counterpart contribution of $22m.