Brazil to Improve Access to Housing for Vulnerable People in the State of Paraná

The Inter-American Development Bank (IDB) has approved a $150 million loan to Brazil to raise the quality of life of socially vulnerable populations in the State of Paraná who live in informal settlements, shantytowns, or substandard housing and are more exposed to the impacts of climate change. The project will build approximately 5,600 homes for vulnerable families.

This is the second operation under the $600 million  ProMorar Conditional Credit Line for Investment Projects (CCLIP), which was approved in 2023.

This loan will help vulnerable people access equitable and sustainable housing solutions. The program will build social housing with connections to basic utilities, as well as improvements to the urban environment. It will also reclaim unoccupied areas with high climate risks by developing and implementing plans for restoring and protecting the environment, prioritizing nature-based solutions.

The State of Paraná has experienced severe and extreme rainfall, humidity, wind, and temperature events that are linked to shifting climate patterns. For different sectors of society, these changes have caused concern about infrastructure systems’ vulnerability to damage and resilience.

This operation contributes to the state’s climate commitments, which in turn are aligned with the Brazilian government's commitments. By using environmental sustainability criteria to develop social housing, the state supports the economical and efficient use of natural resources, helps make communities more livable, and lessens local pollution, among other benefits.

Additionally, the program will work to strengthen institutions. It will fund research into how to make the housing programs of the Paraná Housing Company more efficient financially. It will also analyze how to implement green infrastructure and urban resilience for building social housing.

Although Paraná compares favorably to many other states in Brazil, it still has persistent pockets of vulnerability. Following a sustained decline in poverty, Brazil’s economic crisis from 2014 onward caused poverty to rise significantly. According to the Getulio Vargas Social Foundation, in Paraná, poverty increased by 2.51 percentage points from 2019 to 2021. One factor driving this increase has been dwindling access to decent housing for the vulnerable population—the issue that this operation aims to address.

The IDB loan has a 24.5-year repayment term, a 6-year grace period and an interest rate based on the Secured Overnight Financing Rate (SOFR).