Brussels, May 28, IRNA-The World Bank has approved a total of $344 million in loans for two projects to support the Iranian government.

The loan will be used in delivering a clean and reliable water supply and sanitation to poor urban neighborhoods and boosting agricultural productivity in farming communities.

The Bank in a statement received by IRNA in Brussels Friday said that in the cities of Rasht, Babol, Sari and Anzali along the Caspian Coast, the sewerage system is underdeveloped with wastewater discharged to ditches and rivers.

About 98 percent of the urban population in Iran is connected to public water supplies, but only 23 percent have access to public sanitary sewerage.

As a result, the water supply is polluted and the environment unhealthy, posing a health risk to the one million residents in these cities.

The Northern Cities Water Supply and Sanitation Project ($224 million) is part of a long-term plan to extend water supply and wastewater collection and disposal systems in Rasht, Babol, Sari and Anzali to ensure residents have reliable supply of water.

Wastewater collections services and treatment facilities will improve health conditions in urban centers and contribute to the protection of natural resources in the area, like the Anzali Lagoon.

The project will also strengthen local institutions to improve the efficiency of water service delivery.

In Iran, more than 90 percent of water is consumed by agriculture, which accounts for one-fourth of non oil export earnings.

Although the country has invested heavily in building dams, it is facing a water crisis on several fronts. Irrigation water use efficiency remains very low despite the importance of agriculture and water quality is deteriorating with silt infiltrating dam reservoirs due to poor forest and range land management, noted the statement.

While benefits from Iran's investments in dams have been substantial in terms of securing much needed water for economic development, there is scope for improving water resources management on a river basin scale by applying global best practices, says Joseph Saba, World Bank Country Director for Iran.

In response to these challenges, the Alborz Integrated Land and Water Management Project ($120 million) will pilot a holistic approach to managing land and water resources at the river basin level in the province of Mazandaran along the Caspian Sea.

Named after the Alborz mountain range that stretch across the northern provinces, this project will modernize irrigation and drainage systems and involve farmers in decision-making on water allocation and management by creating Basin Water Councils and Water Users Associations.