water and sanitation in 2002 and the innovative decree about transfers to the water supply and sanitation sector of 2005 as well as the draft plan for a water and sanitation sector law. the world bank group contributed to the praguas project with a loan of us$48 million, paid by the international bank for reconstruction and development. rural and small towns water supply and sanitation project ii (praguas) since 2001, the proyecto de agua potable y saneamiento para comunidades rurales y pequeños municipios (praguas or rural and small towns water supply and sanitation project) became the government's primary instrument to face the sector's challenges, influencing key options about policy (see above), extending coverage and giving incentives to improve quality, efficiency and cost recovery of the service. to satisfy requirements of quality, efficiency and cost recovery, praguas offers technical assistance and financial incentives to municipalities which are interested in delegating water supply and sanitation to autonomous operators, such as public or private utilities, cooperatives etc. referring to coverage, between 2001 and 2006 praguas i equipped 252,000 persons with new supply systems and 127,000 people with on-site sanitation (i.e., approximately 5% and 3% of the ecuadorian rural population of 4.7 million people). in small towns (cabeceras cantonales), where water service was interrupted, technical assistance was provided to improve the performance, separating service provision from direct provision by municipalities and increasing operative efficiency, to reach continuous sustainable service of good quality. in view of the fact that designs for more than 600,000 inhabitants (which is 13% of the ecuadorian rural population) have already been prepared, a fast coverage expansion is expected within praguas ii, which began in 2007 and was to last until 2011. during praguas i, among the country's 219 municipalities, 29 have decided to adopt new service models that are different from direct provision by municipalities. 14 have completed the transition process, exceeding the aim of apl-1 (adaptable program loan) of five municipalities, which was established by the world bank and the national government in 2000. an initial assessment shows that the first group of municipalities, which have delegated their water supply and sanitation services, like cayambe (municipal company), pedro moncayo (municipal company, privately operated), pujilí (municipal company), guaranda (municipal company), caluma (mixed company) and echeandía (cooperative) have significantly increased their operative efficiency and raised tariffs to at least cover their operation and maintenance costs. the second stage, called apl-2/praguas ii was approved by the world bank's board on july 25, 2006. praguas ii is expected to provide the following benefits: i) support for consolidating the framework of incentives for investments in water supply and sanitation, as well as technical assistance to present a water law to the congress and the relevant regulations for its application; ii) a group of complementary activities to extend coverage under a demand-driven approach, enhancing hygiene benefits due to the new infrastructure and offering support to water boards aimed at strengthening the system's sustainability; iii) technical assistance and investment financing to improve quality, efficiency and cost recovery of water supply and sanitation services and management of solid waste in small towns; and iv) a communication program to develop support for sector reform. until 2011, praguas ii is expected to provide water supply and/or sanitation for 405,000 inhabitants in rural areas, such as the efficient water supply for 220,000 people in small towns and sanitation managed by delegated operators for 120,000 persons. all service provision is done with a demand driven approach, respecting gender, interculturality and environmental care, thus aiming at an effective and sustainable use of the services. interamerican development bank (idb) the interamerican development bank supported investments in the three largest cities of the country - quito, guayaquil and cuenca - through ten programs with a total amount of us$400 million. in 2006, the idb approved a new loan in the amount of us$62.25 million for the town of cuenca. european union passe is a program of the health ministry for the provinces of the central sierra region, which has received a grant from the european union. belgium since 2003, the belgian government has supported the agua potable para la sierra norte (aposino) or potable water for the northern sierra region, which is a technical assistance program in the provinces of imbabura and carchi. international organization for migration the international organization for migration (iom) carries out a development program in rural areas and small towns in the northern region of ecuador, called northern border development program. the program is financed by usaid, which has invested us$63m from 2001 to 2007. care the humanitarian organization care is working in 15 ecuadorian provinces, concentrating on rural areas and especially on projects close to the northern and the southern border. care works closely with the municipalities. in the last 10 years, care has contributed to significantly increasing water coverage under a sustainability-driven approach. small ngos numerous small non-governmental organizations (ngos), such as water ecuador (formerly known as agua muisne), fundacion yanapuma, and eden's rose have addressed the issue of drinking water and sanitation on a local level and have worked with many rural coastal and andean communities in ecuador to develop water and sanitation programs where several of the larger organizations listed above have not yet reached.